Number of mortgages for new landlords at record low

Research from Moneyfacts shows that the proportion of mortgage deals for new landlords has shrunk to a record low.

Related topics:  Landlords
Warren Lewis
4th July 2016
house data

Year-on-year, the number of buy-to-let mortgages has increased, so it would be fair to assume that the availability of deals for first-time landlords has also expanded - however, the research shows this is not the case.

Five years ago the precentage of the buy-to-let market that was available to first-time landlords was 82% - but today, that number stands at 75%.

Charlotte Nelson, Finance Expert at Moneyfacts.co.uk, said:

“Despite all the changes to regulation in the BTL market, the number of BTL mortgages has increased; however, first-time landlords have been missing out on this boost in product numbers. Indeed, the percentage of the market that is available to new landlords has now dropped to just 75%, down by around 10% in two years.

“As first-time landlords don’t have a proven track record in managing rental properties, offering them a BTL mortgage poses a greater risk to the lender, and it’s this risk that is making the number of first-time landlord deals remain relatively static.

“The additional regulation in the BTL market and the added economic uncertainty following the Brexit vote means even more lenders may reconsider whether first-time landlords are a ‘safe bet’. As a result, would-be landlords are likely to face more probing questions about their finances than their more experienced counterparts.

“Nevertheless, high rents and rock-bottom mortgage rates mean that BTL is still an attractive proposition for aspiring landlords, particularly those who are fed up with the dismal savings options currently available. However, BTL is not without its risks, so anyone considering it as an option should seek the advice of an independent financial adviser to determine whether it is the best choice for them.”

More like this
Latest from Financial Reporter
Latest from Protection Reporter
CLOSE
Subscribe
to our newsletter

Join a community of over 20,000 landlords and property specialists and keep up-to-date with industry news and upcoming events via our newsletter.