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Average Btl Mortgage Over 30% Higher Year-On-Year

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More money please

TBMC’s latest Landlord Profile Tracking Index has indicated a increase in both loan size and loan-to-value for buy-to-let mortgage offers during the third quarter of this year.

The commercial and buy-to-let specialist has also reported a narrowing price gap between fixed rates and trackers, meaning that fixed rates are proving popular amongst landlords, as well as continuing rise in remortgaging demand.

Andy Young, chief executive at TBMC, said: "It is encouraging to have seen the steady increase in loan size over the last three quarters with the average buy-to-let mortgage now over 30% higher than it was during the final two quarters of 2009. This reflects the gradual recovery of property prices and the availability of some higher loan-to-value buy-to-let products in the mortgage market. The average loan-to-value is also creeping up slowly and was 66.13% in quarter three compared with 64.23% during quarter one."

He said that for mortgages offered in quarter three this year via TBMC, the average fixed rate was 4.71% compared with 5.24% in the final quarter of 2009. However, tracker rates have started to increase since the beginning of the year (4.15% in Q1 2010) and the average tracker rate offered in quarter three this year was 4.45%.

He added: "As the pricing of trackers and fixed rates have converged we have, unsurprisingly, seen a rise in popularity of fixed rates and in the third quarter there were more fixed rate mortgages offered (55%) via TBMC than there were trackers (45%).

"For the fourth quarter in succession we have seen an increase in the percentage of applications received for remortgages compared to purchases, with an almost even split in quarter three this year. 48% of applications were for remortgages compared with 52% for purchases. This may reflect increasing competition in the market as new lenders have entered the market and established lenders like Paragon have re-emerged, resulting in more attractive buy-to-let products for existing landlords.

"The buy-to-let mortgage market has stabilised and there are some positive signs appearing with increasing competition in the market. However, the level of finance available to landlords is still very low, at just around £8 billion of new loans expected in 2010, so there is still a way to go the before the market recovers to a normal level and to the extent that supply meets demand."

Yes. People really are stupid enough. I have friends and family still chomping at the bit. Oh well.

Who's got the bottle to fund the BTL brigade any more, especially as taking speculative punts on land value, when land has topped out, seems rather unprofitable...

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