Assessing market conditions for new and existing landlords

Posted under General by Michael

There are both losers and winners in buy-to-let market at any given point of time, but certain market forces have an equal impact on all. The prolonged credit crunch is one of them. It has resulted in hundreds of buy to let mortgage products being pulled out off the market.

Those that remain on the market now seek much bigger mortgage rental cover than that a year ago, typically 125 per cent of mortgage payments, and even higher in some cases. All this has made it much tougher for new landlords to secure a mortgage.

Conditions are also unfavourable for existing landlords who are looking to remortgage for a better deal. There are a few who are even more affected. For example, those who entered off-plan flats deals in inner city emerging ‘hotspots’, are worst affected.

A mortgage market analyst notes: “You can build a case to state that if the credit crunch does not ease (which does not seem like happening any time soon), and gets worse, that landlords who are now unaffected could also start to suffer. There is some risk of more pain left for buy to let investors.”

More