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ralphmalph

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The gap between supply and demand for buy-to-let (BTL) mortgages is widening. According to price comparison website moneysupermarket.com, enquiries for BTL mortgages have increased by nearly 50 per cent since August 2008 as investors look to take advantage of lower property prices. However, available BTL products have diminished by more than 70 per cent over the same period.

And while the dramatic decreases in the Bank of England's base rate have seen a fall in mainstream mortgage rates, BTL mortgage rates have lagged behind. According to moneysupermarket.com's figures, the average rate for mainstream mortgages has reduced by 1.95 per cent since August last year, while BTL rates have only fallen by 1.13 per cent. Loans to value ratios (LTVs) on BTL mortgages have also fallen around 10 per cent from their peak two years ago - the average LTV now stands at around 75 per cent.

Thanks to the difficulties faced by all first time buyers, the need for rental housing is increasing, but there may not be enough landlords available to cater for this demand. Rent prices have already risen and, with the lack of affordable BTL mortgages, this could continue.

Ray Boulger, senior technical manager at John Charcol, believes it is - provided you can raise the capital and are aware of the risks, now is a good time to invest. "Rental incomes will generally be adequate to cover a BTL mortgage. House prices will rise back to where we were two years ago," he says.

However, Alan Lakey, partner at independent financial adviser (IFA) Highclere Financial Services, is less upbeat: "BTL has become much more difficult over the past two years. The market is moribund...It will come back, but I think it might be 2011, not next year."

Seems like the british public's love afair with owning multiple properties has not ended. Must be all those public sector employees looking to augment thier gold plated pensions that are soon to become rust covered pensions.

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gutted..theres a shortage so people want to make it worse.

there is no shortage...money is just too cheap for qualified borrowers.

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gutted..theres a shortage so people want to make it worse.

there is no shortage...money is just too cheap for qualified borrowers.

So surely, if you can afford to take advantage of this once in a lifetime opportunity you should do so, no?

The only thing that is going to change people's behaviour is tax

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