Nottingham Letting Agent Property Blog
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Profile of Buy to Let Landlords Is Changing
Apparently the profile of buy to let landlords is changing, and, buy to let lenders are seeing an increase in the number of mortgage applications from first time borrowers. According to mortgage specialist John Charcol, growing numbers of middle-aged homeowners who have substantial equity in their property are choosing to let rather than sell, and are then using the equity released to either buy another property in which to live or are choosing to rent.
Some of these new landlords are keen to move but are reluctant to accept a lower price for the property, while others now see their home as an asset rather than a place in which to live, and are choosing to use it for pension planning. Other mortgage lenders have seen an increase in the over 50s looking to take out a buy to let mortgage, however the amount borrowed is based on rental income and must be at least 125% of the monthly mortgage payments. Maximum lending tends to be around 75% of the property's value, although there are a few lenders still offering up to 85% loan to value. The maximum age at the end of the life of the mortgage ranges from between 75 and 90.
Although the Association of Residential Letting Agents still thinks there will be substantial demand for rental property, they are forecasting much lower but more sustainable levels of growth of between 4% and 5% this year. They have also noted that many professional landlords were putting plans to buy more properties on hold for this year and there has been an 8% increase in those choosing to sell.