February 15, 2010

Buy-To-Let Loans At Nine-Year Low – Get Expert Help

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The number of buy-to-let loans advanced last year was down by more than a half on 2008 statistics and was the lowest figure since 2001 – proof that if you need a buy-to-let mortgage in 2010 you need to seek out an expert's help.

According to the Council of Mortgage Lenders, while new buy-to-let lending increased in the last three months of 2009, for the year as a whole there were only 93,500 buy-to-let loans advanced. That number was 58% down on mortgages advanced in 2008 and is the lowest annual volume since 2001.

Lenders were unhappy to offer buy-to-let loans last year for fear of falling house prices and high levels of personal debt. As a result, buy-to-let gross lending was £8.5bn, down from £27.2bn in 2008. The buy-to-let mortgage market shrunk from more than 10% of all UK mortgages in 2008 to just over 5% in 2009.

But things are improving – at the end of the year, lending was up on previous quarters of 2009 as house prices rose and lenders became more confident that borrowers would not default on their buy-to-let loans. Michael Coogan, director general of the CML says: "The figures show that the buy-to-let market continued to improve, albeit slowly, throughout 2009, and we are encouraged by this recovery."

Ian Potter, operations manager of the Association of Residential Letting Agents says: "There is some light at the end of the tunnel, with buy-to-let lending increasing for a second consecutive quarter at the end of 2009. It is also encouraging that the amount of remortgaging in the buy-to-let sector is decreasing, and this indicates that investors are taking a more long-term and pragmatic view."

Things are getting better, but it's still tough times for people looking for a buy-to-let loan. For your best chance of getting hold of one, talk to a buy-to-let adviser who knows the market, knows the lenders and knows what you have to say and do to get accepted.

SOURCE: CML, ARLA, 11/02/10

To keep up with the latest News and comment on the UK buy to let market visit the Buy to Let Mortgage Blog