The buy-to-let market has been highlighted by experts as the main growth area of the mortgage industry over the past decade.
As a result of the pensions crisis and the desire by many to increase their earnings into their retirement, a greater number of people are turning to the BTL market to fuel this need. While interest in the stock market seems to have waned, a greater number of would-be investors see property as a sure fire way of increasing their income and retirement fund, with property prices continuing to increase.
Since its inception 10 years ago, the buy-to-let and its associated products have changed beyond recognition. Launched with average rates of 8.70 per cent, the product criteria of BTL mortgages now mirrors that of conventional prime residential mortgages. The market is also becoming increasingly competitive, as lenders fight to increase their market share and provide the best proposition to the borrower.
Over recent years a host of new lenders have realised the opportunities the BTL market can yield, while mortgage intermediaries are also waking up to the benefits that offering a BTL advice service can provide. A number of brokers have recognised the trend of BTL investors wanting to expand their portfolios and have decided to operate a high net worth only proposition, such is the strength of the market.
The continued affordability crisis for first-time buyers, fuelled by ever-increasing property prices has meant that more people who might perhaps want to buy are being forced to rent. With the Council of Mortgage Lenders indicating that the average age of a first-time buyer now stands at over 30 years-old, this news, while obviously a concern for some areas of the market, provides a fantastic opportunity for landlords, and, as a result, mortgage intermediaries.
While doubts remain over the lack of Financial Services Authority regulation of the sector, lenders have adopted practices to mirror that of the regulated residential mortgage market, making products and practices more transparent to increase confidence in the sector.
