Buy to let mortgage providers 'optimistic' about year ahead

06 May 2010

Written by Gavin Elley.

More than half of chief executive officers for mutual lenders have said they are seeing less of an impact from external factors than they have in two years and are optimistic about the next twelve months, according to research by the Building Societies Association (BSA).

The BSA's annual survey of chief executive officers has found that mutuals believe the higher house prices we are currently seeing will be added to during 2010, with an average forecast of one per cent growth over the year.

They also expect the Bank of England to keep its official interest rate low, predicting it will be 0.83 per cent by the end of 2010. Moneyfacts.co.uk recently said that the interest rates are the lowest they have been all year.

Adrian Coles, director general of the BSA, said: "Mutuals bring democracy, competition, diversity, customer focus and a risk averse culture to the market. There's never been a better time for these mutual values to challenge the PLC banks."

Buy to let landlords may be affected by the chief executives' expectations for the year in that there could be a contraction in buy to let mortgage funding, but those with a buy to let mortgage may find it easier to make their repayments, the Building Societies Association said.

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