Buy-to-let is blazing the trail of recovery

GUY GARRARD, HEAD OF BUSINESS DEVELOPMENT, TIUTA
GUY GARRARD, HEAD OF BUSINESS DEVELOPMENT, TIUTA

The specialist markets have certainly tested our patience in the past couple of years.

The waiting game has dominated many niche arenas but this year we have seen some signs that the buy-to-let market may be emerging from its slumber.

The Mortgage Works recently gave the sector a boost by raising LTVs on its core range from 70% to 80%. This move highlights renewed optimism in the sector and could stimulate more competition at higher LTVs.

The news follows predictions from Datamonitor that suggest gross buy-to-let lending will grow three-fold in the next four years to £25.6bn.

Datamonitor has published a report entitled Buy-to-Let Mortgages And The Rental Sector, which forecasts that gross buy-to-let advances will rise from £8.5bn seen in 2009 to £25.6bn in 2014.

It predicts gross advances will remain flat this year, rising to £15.8bn in 2012, £20.2bn in 2013 and £25.6bn in 2014.

It will be interesting to keep an eye on these figures. While they look optimistic it’s not hard to see the potential of the market. Indeed, it wouldn’t be surprising if more lenders follow the lead of TMW in raising their LTVs.

There’s no doubting the capacity for growth in the buy-to-let sector. Demand is apparent and provided lenders are able to price for risk, there’s no reason we should be far from Datamonitor’s predictions. Then again, a lot can happen in four years.