Buy To Let Loans Becoming Scarce

Wed, 07 May 2008

The option of rented accommodation is rising in popularity among Brits, according to new research by moneysupermarket.com.

A survey by the price comparison website has revealed that the number of people opting for rented accommodation has risen by 5 per cent since last October.

According to the website, the surge in demand has been driven by potential first-time buyers being forced to delay their plans for property ownership by mortgage companies tightening their lending criteria and raising deposit requirements in return for their best interest rates .

The moneysupermarket survey revealed that eleven per cent of those polled said they could no longer afford a mortgage or had been thwarted by lenders new high deposit requirements.

Despite the figures highlighting a boom in business for existing and potential landlords, such property investors are being badly affected by the demise of the UK mortgage market .

The company found that 40 per cent of buy-to-let mortgage products have disappeared in the past month and that in the past 12 months the number of buy-to-let products has fallen from 4,025 to 674, with almost 600 loans removed since the end of March.

Louise Cuming, head of mortgages at moneysupermarket.com, warned that people are being forced into the buy-to-let market at a time when buy-to-let mortgages are becoming scarce, which could lead to a crisis in the UK housing sector.
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