Posts with tag: Buy-to-Let

The latest mortgage lending trends data from UK Finance has been released, highlighting that fewer buy-to-let home purchase mortgages were completed in August 2019 than in the same month in 2018. 5,900 were completed, down by 3.3% on the previous year.

The highlights for august mortgage trends also include:

• There were 13,800 remortgages in the buy-to-let sector, 0.7% fewer than in the same month in 2018.

• There were 18,640 new remortgages with additional borrowing in August 2019, 2.9% fewer than in the same month in 2018.

• For these remortgages, the average additional amount borrowed in August was £55,000. 

• There were 18,100 new pound-for-pound remortgages (with no additional borrowing) in August 2019, 2.3% fewer than in the same month a year earlier.

• There were 35,010 new first-time buyer mortgages completed in August 2019, 0.7% more than in the same month in 2018. 

• This is the highest monthly total since August 2007 when there were 35,070 new first-time buyer mortgages. 

• There were 35,380 homemover mortgages completed in August 2019, 5.5% fewer than in the same month a year earlier.

Shaun Church, Director at Private Finance comments: “The number of first-time buyers has reached a 12 year high in the UK. While home-movers have been paralysed by Brexit uncertainty, first-time buyers have capitalised on favourable market conditions, taking advantage of easing house price growth, record-low mortgage rates and new product innovations to make their first step onto the property ladder.

“Government and industry must not, however, think that their job is done when it comes to first-time buyers. The average age of a first-time buyer in the UK remains high at 32, and many of today’s new homeowners are taking out mortgages with terms lasting as long as 40 years in order to afford repayments.

“This new generation of homeowners may therefore not achieve mortgage free status until their early 70s. Continued efforts need to be made to ensure that homeownership remains attainable early in adulthood, to avoid jeopardising this generation’s financial security later in life.”

The buy-to-let market still remains strong, despite recent changes over the last two years.

We’ve seen stricter lending criteria rules introduced by the Prudential Regulation Authority (PRA) and the phasing out of tax relief on mortgage interest payments by April 2020.

Still, property remains an attractive proposition for prospective investors, according to a recent study by London letting and estate agent Benham and Reeves.

This study looked into the opinion of 5,000 buy-to-let investors and revealed that 73% consider property to be the best, least volatile long-term investment.  The study also highlighted that 83% were unlikely to sell their property over the next year, despite economic uncertainties.

So, potential first-time landlords will certainly welcome the news that the choice of first-time landlord buy-to-let products has risen to a record high! Moneyfacts’ latest research shows that the number of available deals for first-time landlords has risen substantially over the past five years. They are up from 645 in 2014 to 1,405 today. In the last year alone, Moneyfacts has seen product numbers increase by 137.

Rachel Springall, Finance Expert at Moneyfacts.co.uk, said: “Entering the buy-to-let market hasn’t been without its hurdles, and almost two years since the PRA introduced rules expected to tighten lending, the move doesn’t seem to have shaken up lenders attitudes to attract first-time landlords. In fact, the number of deals available to these individuals has now boomed to a record high.

“While the rise in choice is good news to prospective landlords, the financial strain of recent tax changes may be starting to show on those who are currently invested in property, according to recent data from the Office of National Statistics (ONS).

“The ONS data highlighted that London private rental prices rose by 0.9% in the 12 months to May 2019, which is the highest annual growth seen since September 2017. This rise may well be linked to the staggered loss of mortgage interest tax relief, which in turn has seen landlords seeking out other ways to boost their income.

“As the market is awash with economic uncertainties and regulatory adjustments, consumers would do well to first seek independent financial advice if they are considering a buy-to-let investment, not just to find the best product, but to also review these impacting influences.”