Buy to let mortgage demand is falling
According to a recent report the demand for buy to let mortgage loans has been falling, even though the demand for rental properties is still high. Officials have found that there has recently been a surge in the number of rental properties coming onto the market, but this is largely due to the high number of homeowners that are unable to sell their homes in the current financial climate, and have instead decided to rent them out until the market picks up.
In addition to this the difficulties that many would be buyers are having in obtaining an affordable mortgage, coupled with the many potential buyers that don’t want to take the plunge just yet due to house prices still falling, is resulting in a healthy uptake of rental properties, with demand likely to remain strong for the foreseeable future. However, the number of buy to let loans has been falling over recent months, reflecting a combination of tighter credit conditions amongst lenders and fewer applications from would be landlords.
The figures show that in the first half of this year there was a fall in buy to let mortgage figures for the first time in three years. Compared to the last six months of last year there was an 18% drop in new buy to let mortgage loans in the first half of this year, with just 144,600 loans being approved. However, the drop in the number of standard mortgage loans being approved was even greater, with a 28% drop in standard mortgage approvals in the first half of this year compared to the final half of last year.
Officials have said that the strong demand for rental homes is still encouraging, and the Council of Mortgage Lenders stated: “We expect the rental market to remain underpinned by strong demand, partly because some people who would like to buy a home are being forced to carry on renting for now.”
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