Buy-to-let mortgage options 'on the rise'
Buy-to-let property investors looking to enter the London housing market within the next few months are likely to see more choice in mortgages available to them, an expert has predicted.
According to Gavin Elley, relationship manager at Mortgages for Business, which specialises in buy-to-let mortgages and property development finance, there has been a marked increase in the number of lenders entering the buy-to-let market over the past two years.
He pointed out that many lenders have worked out that lending to buy-to-let investors has the same risk rating as residential mortgages but is actually an easier transaction.
"You have got the covenant of the borrower and you have also got the covenant of the tenant in there as well, so in terms of risk it is actually better for them," Mr Elley explained.
"More lenders are now starting to move in to the buy-to-let market and that trend is going to continue. Lenders are looking to lend in this area."
Lenders are also showing more interest in the buy-to-let sector because many first-time buyers are struggling to afford deposits for homes and often find it difficult to meet strict lending criteria.
Moreover, the overall reduction in the availability of social housing means that the government is now looking to private landlords to meet the demand for property. So in effect, the government is looking to the private rented sector to take the place of the social housing sector.
The wider availability of buy-to-let financing is likely to increase interest from foreign property investors, who could conduct money transfer transactions to the UK in order to take advantage of prime London housing stock.