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Sunday, January 15, 2012

BTL Mortgage review of 2011

2011 was a good year for the BTL mortgage market with an increase in the number of lenders and products available bringing more competition, wider choice and better deals for landlords.

Kent Reliance re-launched into the buy-to-let market in 2011 through a restricted number of distributors. It is currently offering a range of competitive landlord mortgages via four selected intermediaries only, including the provider of Property Hawk Mortgages. The core product range includes a 4.19 per cent 2 year fixed rate up to 75 per cent LTV with a 2.5 per cent fee and is also available on houses in multiple occupation, limited companies, student lets and freehold units split into flats.

Kent Reliance also launched an 85 per cent LTV product – 5.99 per cent fixed for 2 years with a 1 per cent fee – available from a limited tranche of funds and accessed via its selected distributors only.

There are also some very attractive rates currently available from regional building societies such as Leeds, Hinckley & Rugby and Saffron.

There has been an increase in the number of products with incentives such as free valuations, free legal fees, no early repayment charges or no completion fee. The remortgage market is also showing signs of improvement with more options available – good for those existing landlords looking to release equity to expand their portfolios.

Whilst growth in the market has been steady over the last twelve months it is still the case that the demand for buy-to-let mortgages in the UK outstrips supply, and further product innovation is required to support residential property investors during the year ahead.

The eurozone crisis has added extra pressure to the already fragile financial markets and it is expected that the overall mortgage market will remain flat in 2012. However, many industry experts predict that the buy-to-let sector will continue to experience an increase in new lending.

As UK banks await the outcome in Europe, it is likely that the uplift in buy-to-let business next year will be driven by existing specialist lenders and regional building societies which have demonstrated a healthy appetite to lend to landlords.

However, there could be other developments and markets can move quickly. For example, Abbey re-entered the buy-to-let market in December with a limited range of products, which could be an indicator of its desire to be a serious player in 2012.

Overall, the outlook for landlords is positive and the ability to arrange buy-to-let finance should continue to improve during 2012.

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