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Council of Mortgage Lenders
Buy to Let Lending
Despite strong demand from tenants for accommodation in the private rented sector (PRS), lender restrictions are making it difficult for new landlords to enter the Buy to Let (BTL) market. This is the opinion of Landlord Assist, a tenant referencing firm, with managing director Graham Kinnear explaining that "onerous deposit and lending conditions", as well as restrictions on the type of property lenders will provide a mortgage for, are stifling growth in the PRS.Commercial director at the organisation Stephen Parry stressed that without better access to finance, there will not be enough homes in the PRS to meet the growing demand. "More properties on the market will help stabilise rent prices, so we would like lenders to take a more proactive approach to lending," he stated. Relationship manager at Mortgages for Business Gavin Elley recently commented that landlords need to get used to the fact that high loan-to-value (LTV) mortgages of 85 per cent or more are unlikely to be made available to BTL borrowers in the near future."In the present climate, it is going to be 75 per cent and below - that is where lenders are going to be comfortable. Psychologically, landlords will have to get accustomed to putting more cash into transactions," Mr Elley observed. He pointed out that there is currently only one lender in the UK offering an 85 per cent LTV product, adding that other financial organisations are unlikely to follow suit.However, figures published last month by the Council of Mortgage Lenders (CML) showed that BTL lending increased in the third quarter of 2011, compared to the previous three-month period. The association revealed that at a total value of £3.8 billion, levels of such loans had reached their highest point since the final quarter of 2008. Paul Smee, CML director-general, pointed out that despite such improvements, BTL mortgage volumes are "still only around one-third of their former peaks".
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