The buy-to-let sector has been one of the biggest casualties of the last two years, with 93% of all deals disappearing in that time. Landlords unable to find more than a 20% deposit can no longer find a new deal, despite deals requiring just a 10% or 15% deposit making up 64.8% of the market just over two years ago. Only four deals from Clydesdale and Yorkshire Bank remain for landlords with a 20% deposit. If landlords want a choice of deals then at least a 25% deposit is needed.
However, there are signs the market is changing. Commenting, Michelle Slade, spokesperson for Moneyfacts.co.uk said: “Numerous BTL lenders have pulled out of the sector, while many of the remaining lenders restricting the number of deals on offer, making it harder than ever for landlords to find a competitive mortgage.
“The number of deals available is a long way off the peak seen in August 2007, although in the last few months the sector has seen positive signs with the number of deals available increasing from the all time low of 179 in September 09 to 239 available today.
“Many landlords’ biggest problem in securing a competitive deal will be finding the deposit needed as previous house price falls are likely to have eaten into the equity available in their portfolio.
“At least a 25% deposit is needed, but in the residential market a 40% deposit is needed to secure a good deal.”