Landlords suffer 95% slide in buy-to-let loan products
By Jeff Salway, The Scotsman
THE number of mortgages available to landlords has plunged by 95 per cent in just two years, new figures show.
There are now just 213 buy-to-let mortgage products on the market, compared with 4,384 two years ago, according to research published today by comparison website Moneysupermarket.com.
Since the outset of the credit crunch in late 2007 lenders have increasingly viewed buy-to-let borrowers as riskier than normal borrowers and have tightened their deposit demands accordingly.
Louise Cuming, head of mortgages at Moneysupermarket.com, said landlords now need a deposit of at least 25 per cent to secure a mortgage. She added that lenders are also hiking the minimum rent they require landlords to charge.
"In 2007 the average requirement was for the rent to represent 112 per cent of the mortgage payment. The average requirement now is for rent to cover 123 per cent of the mortgage payment," she said.
But with the average rent falling from £873 to £819 in the last year, landlords face increasing difficulties securing affordable loans, Cuming claimed.
"The uncompetitive nature of the products on offer does not reflect the need in the market from current landlords, and if nothing changes, this is a sector of the market that will continue to suffer," she said.