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Monday, January 26, 2015

A new year BTL Mortgage Update - 2015

Andy Young, at Property Hawk Mortgages says:

As 2015 starts to unfold, I am feeling very optimistic about what lies ahead for the buy-to-let mortgage market. 2014 was a year of considerable growth and product development. Property Hawk Mortgages had access to some very competitive exclusive products from a number of lenders and, in fact, received its highest levels of business since the credit crisis.

This is obviously a great way to lead up to a new year and I am predicting more good things to come with the key drivers in the buy-to-let sector remaining strong such as high tenant demand and good rental yields, the appetite of landlords remains unabated.

2015 is likely to see more lenders in the buy-to-let arena providing a greater choice of products and resulting in increased competition. There will be more options for professional landlords too with the launch of Fleet Mortgages in January, and others yet to be announced, by the end of the first quarter.

In 2014, Property Hawk Mortgages offered exclusive buy-to-let mortgage schemes with 6 different lenders, so I am expecting to see more lenders providing market-leading exclusive products through restricted distribution channels in 2015. This strategy helps lenders to control the quality and quantity of new business.

There is likely to be further innovation in the market too, with lenders offering alternative schemes like the Castle Trust Equity Withdrawal Scheme. This scheme is an equity loan, secured via a second charge, of up to 20% of the property value and up to 85% LTV including the primary mortgage. It is now also available for new purchases through Property Hawk Mortgages in conjunction with a lender’s first charge buy-to-let mortgage.

There is also the possibility of some lenders introducing a level of flexibility in their lending such as providing a forward funding facility. This would allow landlords to borrow up to, say, 60% LTV with the option to drawdown a further 10% at some point in the future. This would be especially useful for landlords who buy properties at auction when funds are required at short notice.

As lenders remain keen to provide buy-to-let finance, I think we will see higher levels of lending in 2015. It is expected that the level of new buy-to-let lending was circa £25 billion in 2014, which was a 20% increase on 2013. I am expecting a further increase of 20-25% in 2015 reaching around £30 billion by the end of the year.

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