The Buy-to-Let (BTL) market in London is on a high. The house prices and rents are rising and concurrently mortgage deals are also up. The BTL market is yet again looking up as an attractive investment at a time low rates of interest and stock market volatility are repelling small investors from elsewhere.
London Investment Market looks bright from the view point of landlords. They are keen on capitalizing on the positive sentiments in the rental market. According to the Council of Mortgage lenders BTL mortgages are growing at 19 percent per annum. More and more brokers are reporting that getting BTL mortgages are easier now.
Yet good news is that the average rates for BLT products have fallen to a six-year low as the average rate for a fixed-rate is 4.69 percent that is the lowest since 2007.
These attractive rates may apply only to hefty deposits and there is complaint that supply of the highest 85 percent Loan to Value (LTV) products is still limited. But landlords are confident that the interest rates will stay low and a long-term tracker is the way to go.
Loans to landlords have gone up in a five-year high with the low rates pledging more growth. The value of loans mounted show that a growth of 31percent has taken place. The data from Council of Mortgage Lenders showed that £5.1bn has been advanced to landlords until mid 2013.
The Bank of England Governor, Mark Carney, is on record that rates will remain low until 2016 and is spurring further growth. The mortgage costs for landlords are low and falling further. The low returns from other assets including cash are driving towards better investments in property.
Of late the biggest lenders to landlords had been Nationwide Building Society, Lloyds Banking Group, BM Solutions, Coventry Building Society and Clydesdale Bank.
With Buy-to-Let investment booming in London and other parts of UK borrowing up to £200,000 for BTL is easy assuming the rental income can cover the monthly mortgages. Exclusive interest-rate only mortgages are also available for BTL.
Any way, it is a welcome change with many home buyers making a head way from the days when they were unable to secure a mortgage since 2007 post the financial crisis. Still the scene is that mortgages that required little or no deposit vanished overnight. Now the mortgage is open only to those who have a saving of at least 25 per cent as deposit.