Buy to let mortgage options 'are widening'
Posted on 17th February 2012
The potential options open to people looking for buy to let mortgages are increasing as lenders realise they are more profitable, it has been noted.
Lee Grandin, director at Landlord Mortgages, said that more people are currently looking to purchase buy to let property as predominately rental returns are holding very well due to a general lack of supply of properties.
He explained: "Lenders see buy to let to be a profitable mortgage for them, so they prefer to lend to landlords with a higher margin on the mortgage rates, than the highly competitive first-time buyer market."
The expert said that is driven by two sides, with one being that the lenders can make more money on it, and secondly that the rents are very good for the landlord.
His comments come after Paragon Mortgages recently reported that more than a third of intermediaries saw an influx of buy to let business in the final quarter of 2011, with an average 23.3 per cent of an intermediary's business now being buy to let, compared to 19.3 per cent a year ago.
Mr Grandin said that, with an attractive type of mortgage, it inevitably leads to more lenders wanting part of that profitable mortgage market, so what happens is that the competition allows rates to go and become more competitive.
"We are seeing a slight improvement on rates," the buy to let property expert concluded.