Two-thirds (65 per cent) of all buy-to-let applications in November were for mortgage products under 75 per cent loan-to-value (LTV) – a 12 per cent increase compared with October.
Since Alliance & Leicester entered the specialist mortgage arena five months ago, it has seen a month on month increase in buy-to-let applications. In November, it saw a 37 per cent increase in buy-to-let applications compared with the previous month, following the bank’s entry into the market earlier in the year
Mehrdad Yousefi, head of intermediary mortgages at Alliance & Leicester, said: “Buy-to-let has been the success story of the mortgage market. It has been traditionally favoured by professional landlords who are in the fortunate position to be able to put down much higher deposits than residential buyers, in particular first-time buyers. The surge in popularity can be attributed to the nation’s obsession with bricks and mortar. Having something tangible for their money means people are more willing to buy and watch their profits increase when property prices rise.”
In November, the average deposit paid by landlords taking a product under 75% LTV mortgage with Alliance & Leicester was over £71,000 – 36 per cent of the value of the property. This is 44 per cent over what is needed to obtain this type of buy-to-let product.
The figures also highlight that the majority of investor landlords want stability and certainty for their mortgage costs with almost three-quarters (72%) of products sold on two- or three-year fixed rates.
Yousefi commented: “Since entering the buy-to-let market earlier this year, we are happy with the progress we’ve made in this market in these early days. Professional landlords will continue to flourish as long as there is demand for rented property and the influx of investor landlords is testimony to the growth in this market. Investor landlords are seeing a very buoyant buy-to-let market with the average property purchase price at £199,771 against an average UK house price of £179,425.”
