According to Hamptons', there has been a percentage decrease in its buy-to-let mortgage business over the last month.
Hamptons data showed buy-to-let purchases decreased from 21.88 per cent of all Hamptons mortgage business in September 2006 to 18.03 per cent in October, a fall of 3.85 per cent. This reduction in buy-to-let purchases is in contrast to the healthy increase seen at the end of last month. However, as end of quarter incentives from property developers draw to a close, buy-to-let purchasers face increasing property prices and are finding it increasingly difficult to snap up a bargain.
Residential property purchases, on the other hand, saw an increase of 5.45 per cent as a pre-festive feel-good factor swept the market and buyers, in anticipation of healthy city bonuses, purchased larger and more expensive properties.
Meanwhile, Hamptons data also reports a rise of 4.62 per cent in people opting for two-year variable rate mortgage deals. This increase comes at the same time longer term fixed deals have seen a 4.65 per cent decrease. With the anticipation of base rate rises over the past few months lenders have already built these considerations into their fixed deals and effectively priced themselves out of the market to the benefit of shorter variable products.
Jonathan Cornell, technical director at Hamptons International Mortgages, commented: "With continually escalating house prices and the very real possibility of further increases to the Bank of England base rate, buyers are returning to the market to take advantage of low rate deals while they can. The promise of record City bonuses has also fuelled demand for properties.
"The developer deals that helped buy-to-let investors last month have now finished and property has become too expensive for a quick investment. However, with the Christmas City bonus and a guaranteed return of the developer sales at the end of the year, December’s tracker will be one to watch.”
