Four out of ten intermediaries questioned confirmed that 50 per cent or more of their clients were looking for products with a rental income requirement of less than 125 per cent. The majority of respondents (44 per cent) stated that the most frequently required rental income cover was between 110 per cent and 125 per cent. A significant 30 per cent of respondents also stated that many of their clients were interested in products that focused on personal income assessed buy-to-let lending.
Just over one quarter of intermediaries (26 per cent) stated that 50 per cent or more of clients were looking for products offering loan to value limits in excess of 85 per cent.
Nicola Severn, marketing manager for Mortgage Trust, said: “These results display a strong confidence in the buy-to-let market. Recent figures from the CML confirmed the buoyancy of the sector, and it is obvious from our findings that the appetite for buy-to-let investment shows no sign of waning. With rental demand remaining strong and house prices continuing to climb (61 per cent of intermediaries expect them to increase in the next three months), it is no surprise that buy-to-let investors are keen to secure higher loan to value loans and release equity in order to maximize their investment potential. They do, however, maintain a business like approach and continue to prefer a healthy rental income margin of between 10 per cent and 25 per cent over and above their monthly mortgage payment.”
According to the research, intermediaries also remain confident regarding business volumes. With 35 per cent expecting to write more buy-to-let cases in the coming three months and 44 per cent expecting volumes to stay consistent, it is clear that the recent increase in interest rates has not had a detrimental effect on the market. Indeed, when questioned, 74 per cent of respondents stated that they didn’t expected the base rate rise to have any effect on business volumes, and nearly 9 per cent actually expected buy-to-let volumes to increase due to the rise.
Severn commented: “As expected the bank base rate rise in August appears to have done little to subdue investor’s appetites. Landlords operating in today’s market take a long term view, and rather than deterring investment, many landlords will view the rate rise as an additional hurdle for would-be first time buyers who may in-turn choose to rent for longer. Canny landlords will be looking to provide additional properties to meet this demand.”
