Buy to let mortgage market 'picking up'

20 May 2010

Written by Simon Whittaker

The buy to let mortgage industry was one of the worst hit during the credit crunch but is now showing signs of recovery, Moneyfacts has said.

More home loans are becoming available, the organisation reported, with the number of products on the market increasing from 179 at the sector's lowest point in September 2009 to 304 now - a 70 per cent rise.

Another encouraging shift, the information provider noted, is the upward movement of loan-to-value ratios (LTV) on deals.

Mortgages are now increasingly offering maximum LTV levels of 70, 75 and 80 per cent, while there has been a drop in those carrying LTVs of 60 and 65 per cent.

Lenders are also growing in number and average interest rates have fallen from 5.96 per cent in September last year to 5.66 per cent this month.

Darren Cook, spokesperson for Moneyfacts, said: "This is encouraging news for investors, especially those who were locked out of the market as the maximum available LTVs fell."

However, Mr Cook predicted that, should capital gains tax increase and start affecting more landlords, the recovery could be damaged.

The Association of Residential Lettings Agents (Arla) and the National Landlords Association (NLA) have both recently called for portfolio investors to be made exempt from any changes in the tax.

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