Despite turbulence caused by increased taxation and regulation, confidence in the Buy-to-Let sector is being shown by the banks as the number of BTL mortgage products available exceeds 2000 for the first time ever* (Source Moneyfacts). Just two years ago it stood at 1340 products!
BTL finance was hardest hit immediately following the last financial crisis, which was widely recognised as being partially caused by irresponsible mortgage lending. Dramatic changes in lending criteria came into force following the Mortgage Market Review (MMR) in 2014. Lenders were very reluctant to stick their head above the parapet again.
However, time has moved on, and the property investment market has proven to be very resilient. The long-term prognosis is good, and interest rates are likely to remain low, even if they rise by the odd quarter percent. Demand for rented property continues to outstrip supply and BTL repossessions are minimal.
Lenders are, after all, in the business of lending. So, albeit cautiously, they have over the last few months been finding ways of lending creatively, hence the increase in products on offer (464 new deals in the past year alone). Some of these deals are designed for the increasing number of properties bought via a limited company, and for investors with four or more properties, where different rules have applied since Sept 2017.
Investors can possibly take comfort from the fact that the banks’ economists have clearly decided that it’s business as usual and that property investment remains firmly on their map as a relatively safe and secure proposition.
If you’d like help in assessing any property for its suitability as a BTL investment, why not speak to one of our in branch Financial Advisors.
Neil Newstead, FARLA MNAEA MIRPM
Chief Executive Officer