More buy-to-let mortgages approved
The number of properties bought with buy-to-let mortgages increased by 84,000 in 2011 according to the Council of Mortgage Lenders’ latest figures.
In the final quarter, 34,800 buy-to-let mortgages totalling £4 billion were approved, compared with 26,300 worth a total of £2.9 billion, in the 2010 final quarter.
Demand for rented accommodation has increased significantly since the 2007 credit crunch caused mortgage lenders to tighten up their criteria and demand much higher deposits than previously.
However despite the renewed interest in property rental, the buy-to-let market has a long way to go before it reaches the 93,000 buy-to-let loans approved in the third quarter of 2007, when the market was at its peak.
It isn’t all good news for landlords though, as new research by the BDRC Continental quarterly Landlords Panel reveals a substantial increase in the number of landlords making a loss.
In the fourth quarter of 2011, 8 per cent of landlords with 20 or more properties made a loss, compared with just 1 per cent in the third quarter.
The research also showed that rental yields for all landlords fell from 6.7 per cent in the third quarter, to 5.9 per cent in the final quarter of 2011.
Meanwhile Skipton Building Society has reduced rates and fees on its buy-to-let mortgages.
The rate on Skipton’s two-year fixed rate buy-to-let mortgage for those with a loan-to-value (LTV) ratio of 70 per cent or less has been reduced to 3.89 per cent from 4.09 per cent.
There is an application fee of £245 for the product and a completion fee of £2,250.
Skipton’s Head of Products, Kris Brewster, said: “We recognise that landlords play a vital role in bringing competition and vitality to the struggling mortgage market - as well as providing private letting options for the first time buyers of the future.”
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