Large Buy to Let Mortgage Market

Buy-to-Let mortgages celebrated their 15 year anniversary this year. From the highs of 2008, where a massive £44.6bn in gross lending was achieved, to lows of just £8.5bn, the market has experienced both highs and lows but this year has seen appetite for these products increase from both a consumer and lender perspective.

As many first time buyers struggle to get on the property ladder it has left them with little choice but to rent, and in turn many amateur landlords have taken the opportunity to cash in. Many London boroughs have seen double digit growth in rental yields over the last 2 years, and Savills predict rental yield growth of 20.6% over the next 5 years in prime London. Coupled with a predicted 22.7% growth in capital values over the same period, it is no wonder that existing owners are keen to retain a stake in the prime market.

As Islay Robinson (Director at Enness Private Clients) explains ‘Many of our clients with property in prime areas that are considering moving out of London for family reasons, or simply moving within London, are extremely reluctant to sell their current properties. For the majority it is a solid investment at a time when other, more traditional asset classes are particularly volatile.’

Only 12 months ago the BTL products available were both few in number and high in price. However with lenders looking to increase the margins on their capital, BTL products have seen a real resurgence of late.

As Robinson goes on to explain; ‘One year ago both above and below 1m borrowing, it was a close run thing as to whether the rental yield could cover the cost of the borrowing for most people. However with competition amongst lenders increasing at all levels we have seen the price of borrowing decrease, especially for those with well-paid jobs or previous landlord experience.’

Many of the Private Banks that Enness deals with have moved into the sector as well, and whereas before borrowing over 1m on a BTL basis was extremely difficult we are seeing ever increasing options on this side as well, with rates sometimes much lower than those that are advertised by more mainstream lenders.

If you would like to discuss the options that are available to you for Buy-to-Let, please call your adviser direct or the office on 0207 940 4747. Alternatively email us at;