Lender competition ‘increases BTL activity’
The intermediary forecast showed strong rental demands and increasingly competitive mortgage deals are encouraging investors into the market.
As a result of positive factors within the BTL sector, including increased diversity and availability of products, Mortgage Trust has reported a growth of 17 per cent in business volumes for first-time landlords, the first increase in this figure since March 2005.
Mortgage Trust’s October survey revealed 50 per cent of those questioned expected to see further increases to their business volumes due to competitive and innovative products.
Coupled with strong rental demand and industry belief that interest rates will fall further during the next three months, a positive BTL market forecast was predicted.
Nicola Severn, marketing manager at Mortgage Trust, commented: “The forecast shows that intermediaries welcome further product development and believe that healthy competition in the market serves to boost the sector.
However, they are aware that the long-term future of the market is first and foremost dependent on factors such as steady rental demand and a healthy interest rate environment. Overall brokers seem clear that the market is working well and are confident for the future of the sector.”
David Salusbury, chairman of the National Landlords Association (NLA), said the BTL market was ripe for investment. “House prices do appear to be lowering and it is therefore not surprising that individuals are looking closely at the buy-to-let market.”
The threat of regulation, with the forthcoming Houses in Multiple Occupation (HMO) legislation and Home Information Packs (HIPs), has apparently not put many landlords off with only 5 per cent of respondents arguing that HMO legislation will hinder the market and 10 per cent saying HIPs will have a negative impact.