Buy to Let Mortgage Products Fall 95%
6 May 2009
New buy-to-let landlords face a difficult task finding a suitable mortgage, with the number of available buy-to-let mortgages plummeting from 4384 to just 213 in two years- a reduction of 95% - according to research by Moneysupermarket.
The firm added that buy-to-let mortgage rates have not fallen by as much as mainstream mortgage rates either, following the decreases in the Bank of England base rate; since June last year the average rate for mainstream mortgages has reduced by 2.6%, while buy-to-let rates have only fallen by 1.51%.
Banks are also demanding larger deposits from landlords - there are no buy-to-let mortgages left at 85% LTV, meaning prospective landlords will need at least a 25% deposit to secure a mortgage.
Louise Cuming, head of mortgages at Moneysupermarket, said the credit crunch had killed off the majority of buy-to-let deals, as banks view buy-to-let borrowers as riskier than normal customers.
She added: "The buy-to-let mortgage market is like a ticking time bomb; the uncompetitive nature of the products on offer does not reflect the need in the market from current landlords, and if nothing changes, this is a sector of the market that will continue to suffer."
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