Nine in 10 buy-to-let mortgage deals have disappeared

carolt

Oh dear.

http://www.telegraph.co.uk/finance/personalfinance/borrowing/mortgages/4241575/Nine-in-10-buy-to-let-mortgage-deals-have-disappeared.html

More than 90 per cent of all buy-to-let mortgage deals have disappeared in the past year as lenders now demand a 20 per cent deposit, research shows.


Landlords who are unable to find at least a 20 per cent deposit will be unable to find a deal, according to personal finance researchers Moneyfacts.co.uk.

It said mortgages for landlords with between 10 per cent and 15 per cent used to make up 61.1 per cent of the market, but they are no longer available.

The number of deals for a 20 per cent deposit has also plummeted. Landlords really need at least a 30 per cent deposit to get the best deals and even then they are paying a hefty price, Moneyfacts said.

The figures are unwelcome news for landlords who are looking to remortgage but have sent the equity in their homes plummet as a result of falling house prices.
Michelle Slade, an analyst at Moneyfacts.co.uk, said: "Falling house prices have caused the equity in many landlords' portfolios to reduce, but with no deals available for less than a 20 per cent deposit, many have no option but to move onto the lender's standard variable rate at the end of their existing deal.

"For some this may be no great hardship, but some lenders have not passed on cuts to their BTL SVRs as they have to their residential version.

"BTL lenders have also tightened criteria, restricting the size of portfolios that landlords can have, both in number of properties and maximum total advance."

skap7309

RIP BTL. May 'proper' house ownership commence.

JonnyBravo

This is a good thing. Proper deposits just like for OO's will get the best rates and of course protects the banks from NE.
A landlord with a deposit is less likely to be an unreliable landlord IMO.

Of course if you've got your BTL lending against your primary residence then you're really laughing!

chucky

carolt wrote: »

Oh dear.

http://www.telegraph.co.uk/finance/personalfinance/borrowing/mortgages/4241575/Nine-in-10-buy-to-let-mortgage-deals-have-disappeared.html

More than 90 per cent of all buy-to-let mortgage deals have disappeared in the past year as lenders now demand a 20 per cent deposit, research shows.


Landlords who are unable to find at least a 20 per cent deposit will be unable to find a deal, according to personal finance researchers Moneyfacts.co.uk.

It said mortgages for landlords with between 10 per cent and 15 per cent used to make up 61.1 per cent of the market, but they are no longer available.

The number of deals for a 20 per cent deposit has also plummeted. Landlords really need at least a 30 per cent deposit to get the best deals and even then they are paying a hefty price, Moneyfacts said.

The figures are unwelcome news for landlords who are looking to remortgage but have sent the equity in their homes plummet as a result of falling house prices.
Michelle Slade, an analyst at Moneyfacts.co.uk, said: "Falling house prices have caused the equity in many landlords' portfolios to reduce, but with no deals available for less than a 20 per cent deposit, many have no option but to move onto the lender's standard variable rate at the end of their existing deal.

"For some this may be no great hardship, but some lenders have not passed on cuts to their BTL SVRs as they have to their residential version.

"BTL lenders have also tightened criteria, restricting the size of portfolios that landlords can have, both in number of properties and maximum total advance."

Carol your Landlorditis is getting much, much worse ::D

carolt

I think it's incurable. Until rental regulations are changed to re-allow security of tenure.

JonnyBravo

carolt wrote: »

I think it's incurable. Until rental regulations are changed to re-allow security of tenure.

:rotfl:

I think you might be waiting a while. The current lot are a bit too right wing for that and the next lot aren't well known for their left wing views either.

:cool:

IveSeenTheLight

I don't get the joy at seeing less mortgage types.
I don't understand the issues either.

If an institution has 100 different types of mortgage, yes there is choice, but I am only going to take up one of those options.

If each institution only did 1 type of mortgage for all applicants, yes choice is gone, but lending is still available if you meet the criteria.

So in terms of lending being available, what difference is there if there is 1, 10 or 100 different mortgage products?

Its the number of prodcuts that drop, not the available lending money

chucky

IveSeenTheLight wrote: »

I don't get the joy at seeing less mortgage types.

i guess if you have nothing else to be happy at... you have your answer...

fatpig_2

Great news. The one in ten BTL deals left should disappear too. It's a horrible sleazy business

Cannon_Fodder

IveSeenTheLight wrote: »

I don't get the joy at seeing less mortgage types.
I don't understand the issues either.

...

Its the number of prodcuts that drop, not the available lending money

I get where you are coming from. I don't understand why there were so MANY products in the first place.

Presumably brochures had to be printed, different KFIs produced, computer systems added to, leaflet mailshots - both to brokers and customers, etc etc

All that cost money, so there should (unless the beancounters are doing their usual poor maths) have been a return in mind.

Just for some product differentiation, or because there were material differences?

If the latter, then reducing the number of products will reduce the options open to any individual, perhaps resulting in a worse rate, fee, ERC or whatever.

Thrugelmir

fatpig wrote: »

Great news. The one in ten BTL deals left should disappear too. It's a horrible sleazy business

Good news yes. But the owning and letting of residential property has been a business for many years, for example in University towns and cities. So there does need to be loan finance available at commercial rates with sensible LTV's to properly run businessess.

Trouble is it's going to take several years for the existing BTL granted mortgage position to unwind and impact the housing market. Remortgaging ( or lack of cheap finance ) may well be the cause of the next substantial fall in the UK property market.