Lending criteria overhaul in buy-to-let market
A number of new criteria changes are to be brought into effect in the buy-to-let mortgage market, it has been claimed.
One major change will see the availability of funding for heavily-renovated properties that are classified as new builds being curtailed, Capital Home Loans said.
It added that lenders are seeking larger deposits - reportedly of up to 25 per cent - by lowering maximum loan-to-value ratios, thereby making it more difficult for would-be landlords to get onto the buy-to-let property ladder.
Despite the higher barriers, however, analysts note that the market remains strong and that older builds are particularly likely to perform well in the midst of falling owner-occupier levels.
"It is essential … not to judge the whole buy-to-let investment proposition on the performance of new builds," asserted Jonathan Moore, head of Marketing at Mortgages for Business in an interview with mortgagesolutions-online.com.
He added: "Established properties and particularly HMOs and flats above commercial properties provide good long-term yields."
According to the Council of Mortgage Lenders, buy-to-let lending rose by 15 per cent year-on-year in the second half of 2007.
Published 25th March, 2008
© 2008 Estates IT Limited
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A number of new criteria changes are to be brought into effect in the buy-to-let mortgage market, it has been claimed.