Buy-To-Let Mortgage Sector Sees Signs Of Recovery

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New research has found that the number of buy-to-let mortgages on the market are on the up – and more choice means more savings and better deals for landlords.

It is no secret that the buy-to-let sector has been one of the biggest mortgage casualties of the last two years, with 93% of all deals disappearing in that time. Lenders have been uneasy to lend to landlords because of the increased perceived risk of buy-to-let. So the market has all-but dried and many people have suffered as a result.

It is worst for those with less equity in their home – landlords unable to find more than a 20% deposit can no longer find a new deal, despite deals requiring just a 10% or 15% deposit making up 64.8% of the market just over two years ago, according to Moneyfacts. Many landlords' biggest problem in securing a competitive deal will be finding the deposit needed as previous house price falls are likely to have eaten into the equity available in their portfolio.

But there is light at the end of the tunnel.

Michelle Slade, analyst for Moneyfacts.co.uk says: "The number of deals available is a long way off the peak seen in August 2007, although in the last few months the sector has seen positive signs with the number of deals available increasing from the all time low of 179 in September to 239 available today."

"Also, at least a 25% deposit is needed for any buy-to-let loan, but in the residential market a 40% deposit is needed to secure a good deal."

So there are more than a third more mortgages on the market than there were in September of this year – that means a third more choice, a third more competition and a third better chance of getting a great buy-to-let deal.

Landlords are still profiting from their investments and mortgage lenders are still offering loans to the best buy-to-let borrowers. All that is stopping you finding out whether you can be one of those lucky borrowers is picking up the phone and talking to your buy-to-let mortgage adviser.

SOURCE: Moneyfacts, 16/11/09

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