The survey, conducted by Pink Home Loans, reveals that only 11 per cent of the mortgage intermediaries questioned have seen an increase in the demand for buy to let mortgage products compared to before the credit crunch and 16 per cent have seen no changes at all.
Neil Hoare, Sales and Marketing Director at Pink Home Loans comments: “Figures suggest that the demand for rental properties have increased in recent months as people wait for house prices to hit their natural floor, so why have the majority of intermediaries not seen an increased demand for buy to let products?”
An AR of Pink; Dean Lawson from Hannant Lawson, based in Milton Keynes sheds some light on the issues currently affecting the buy-to-let sector: “As a direct result of falling property values and lack of liquidity in the market, many investors and brokers have been hit hard. Where 12 months ago, purchases and remortgages could be funded at up to 90 per cent plus fees, due to falling values any equity in these properties has now been eroded. Many investors are now looking at property values the same, or in some cases, below outstanding mortgage amounts. Who at the start of 2008 with an 85% mortgage could imagine being in negative equity by the end of the year? This equity issue is now preventing many from not only remortgaging, but also therefore for purchasing. A double whammy, in terms of new business levels.
Lawson continues: “Although recent rate reductions have helped the investor in terms of a reduction in expenditure, this will do little to kick start future investment. Before we start to see an increase in demand for BTL products, I believe house prices need to stabilise and the lenders achieve the realistic levels in the pricing of their products”.
