Better mortgage deals are at long last being offered to investors in the buy-to-let market, with one lender willing to provide a mortgage of up to 85% of the property’s value. This is the highest Loan to Value (LTV) figure made available to a landlord since the credit crunch started.
More lenders are looking to enter the buy-to-let market which may see an increase in competition in the sector and provide a better choice for property investors. The last few years have been very difficult for investors in the private housing sector. The financial crisis has seen many banks and building societies stop selling buy-to-let mortgages altogether, while others put their rates up so much that it made it almost impossible for landlords to make any kind of profit.
David Hollingworth, who works for a mortgage brokers, said “It has to be a welcome addition to the current range of buy to let products on the market and opens up options for those keen to invest without making such a big capital outlay required of many lenders. But more lenders need to get onboard, only a small hand full of providers are offering buy to let mortgages for those with less than a 20% deposit and it’s just not enough.”
The main problem for investors has been the amount of deposit required by lenders, many of whom were asking for upwards of a 35% deposit, making it virtually impossible for landlords to expand their portfolio and protect it with landlord insurance. However, with some lenders now offering a mortgage with an 85% LTV this means that landlords just need to find a more manageable 15% deposit. This is the best value deposit deal on a buy-to-let mortgage since the financial crisis began in 2007, and is great news for anyone looking to become a landlord for the first time.