Single-Let And Small Scale Landlords Account For Up To
80% of All New UK Mortgage Applications.
There has been a large rise in the number of ‘Single-Let Landlords’ (landlords with just one buy-to-let property), and small scale landlords (those typically with less than four properties), over recent months up to November 2012.
This is the result of many new investors being drawn in to the buy to let markets by high rents and increasing yields. Average private residential property rents have risen month on month over the last nine months and it is now estimated that Single Let and small scale Landlordsnow account for approximately 80 % of all new buy to let mortgage applications.
The average rent in England and Wales hit a record high for the ninth time at the end of 2012, rising to £741 (GBP) per month.
The highest PRS rental prices were found in Greater London (with an average monthly rent of £1,072 (GBP) Per Calendar Month), with the lowest being £529 (GBP) per calendar month in the North East of England.
Latest figures released by the Council of Mortgage Lenders (CML) show the value of buy-to-let mortgages taken out in the third quarter of 2012 amounted to a staggering £4.2 Billion (GBP), an increase of eight percent from the previous three months.
This represents the highest amount of buy to let mortgage lending in the last four years, contributing to £11.8 Billion (GBP) worth of mortgage loans in the UK.
Overall BTL mortgage lending grew by 20% from 2011 to 2012, and is expected to grow by 30% in 2013.
Due to the expansion in the buy-to-let mortgage market more lenders are now offering attractive BTL rates coupled with the increasing average of LTV deals currently on the market.
Kevin Gibson, of Ascot Mortgages Ltd, says: “The number of first time landlords and accidental landlords has increased dramatically over the last few months, with now more than 1 in 3 buy to let mortgage applications coming from first time investors.”
He also warns that it is very important that all landlords make sure they are mortgaged correctly, and that owner occupier residential mortgages should not be used as an alternative to a buy to let mortgage.
“Some landlords wrongly believe this will help to save them money. This is not the case, and the consequences can be very severe. There are a number of very good buy to let mortgages available on the market which could even save you money, for example Abbey are currently offering extremely competitive rates with a tracker rate of 2.75% for 2 years (60% LTV). In addition, Abbey are also offering a fixed rate of 2.89% for 2 years, exclusive to intermediaries such as Ascot Mortgages Ltd.”
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