Buy-to-let mortgage approvals increase
If you are in the mortgage market for a buy-to-let mortgage, now is the time to see a broker and find out what products are available. This is because the buy-to-let market is more buoyant than it has been in a long period of time.
The Council of Mortgage Lenders (CML) reports that buy-to-let investors took out more than 40,000 mortgages in the first part of 2013, totalling more than £5.1bn.
The good news here is that the value of lending is the highest since the end of 2008. All this points to a healthy recovery in the buy-to-let market. Brokers are anticipating that 2013 and 2014 will be a busy year for buy-to-let. The Association of Residential Lettings Agents says that the average number of properties owned by buy-to-let landlords is now eight, compared to seven at the end of 2012.
Buy-to-let loans approved in the second quarter of 2013 were 19 per cent higher by volume compared to the preceding three months. Approvals were also 21 per cent higher by value than in preceding three months. For a year-on-year comparison, buy-to-let lending was 19 per cent higher by volume compared to the same period in 2012.
Even more impressive is that mortgage brokers are reporting that growth in remortgaging reveals an even stronger recovery. This sector notched up an increase over the same period of 24 percent by volume and 29 percent by value. This sharp increase shows improved funding in markets and an increase in credit flow.
Brokers say that a higher level of remortgaging is happening because buy-to-let landlords are becoming very savvy and are wanting to get the best rates. This year, according to Mortgages for Business, 80 percent of landlords want to remortgage, compared to 55 percent last year.
Overall, by the end of June this year, buy-to-let mortgages made up for 13.3 percent of outstanding lending across the United Kingdom.
The CML says that a surge in strong demand and improved financial conditions are the main reasons behind the increases. The more positive conditions in both the U.K and globally mean that there are more options for landlords for people who want to enter the buy-to-let market.
Another aspect that has boosted the market is that building societies have become more competitive in their offerings, and are in particular offering attractive and competitive arrangement fees.
Mortgage brokers are also reporting that they are seeing the highest levels of lending to first-time buyers since 2007.
If you are looking for a buy-to-let mortgage, it is wise to speak to a broker. This is because they will know more about this specific money market than the average consumer. As well, the mortgage market changes daily and brokers can stay on top of array of products are available and they can also advise on regulations and relevant taxation issues.
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