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Buy-To-Let Borrowing Rates Dive To New Low


02-11-2014


 
The rates are at their lowest since before the recession, fuelling fierce competition between landlords and would-be buyers.

Mortgage rates for buy-to-let landlords are at their lowest rate since before the recession but there are fears it is squeezing out first-time buyers.


By Poppy Trowbridge, Consumer Affairs Correspondent

Buy-to-let borrowing rates are now back to their lowest levels since before the recession.

Some rates are fixed as low as 2.4%, though these types of deals do require a large deposit of around 40%.

Rates have been driven down partly by the growing number of people renting city properties, while lenders are slashing rates to attract new customers.

David Whittaker from Mortgages for Business told Sky News: "Landlords were squeezed out of the market at the onset of the credit crunch.

"They wanted to be borrowing and they wanted to be acquiring properties but there was no funding available to them.

"The extent to which we are seeing a boom today, it is now their chance to borrow funds from more lenders in the market who are active in the buy-to-let space."

The reduction in rates, and steady rise over 2013 in buy-to-let lending, is fuelling fierce competition between landlords and would-be first-time buyers.

The rental market is also contributing to the competition due to a wider reversal in the trend of home ownership.

Roughly 10 million people now live in homes rented from private landlords. That's double the number who did back in 2000.

In addition, lenders are increasingly keen to attract new business and are reducing their rates.

The Office for Budget Responsibility, the Government's preferring think-tank, forecasts house prices will rise by 27% by 2018 and property investors want to profit from that growth.

Research by Mortgages for Business found that 57% of buy-to-let landlords wanted to buy more properties this year alone.

While many economists expect interest rates to rise sooner than expected, and that would help slow the buy-to-let boom, it's unlikely to come soon enough for first-time buyers currently facing such stiff competition.


news.sky.com/

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