First time buyers could be affected by return of buy to let landlords
February 26, 2010
According to a recent report a rising number of lenders are starting to approve mortgage deals for buy to let borrowers following a rocky period when fewer and fewer of these deals were being approved.
However, whilst the increase in buy to let mortgage deals will come as good news for the landlords that want to start out on this venture or increase their portfolios it could spell bad news for the first time buyers that are still struggling to get onto the property ladder.
A report in the national newspaper The Times has recently suggested that the upsurge in buy to let mortgage approvals could result in buy to let borrowers pushing potential first time buyers out of the market altogether when it comes to the purchase of one and two bedroom properties, which is what many first time buyers aim to buy.
These are also the types of property that many buy to let borrowers tend to target, and this could cause severe problems for first time buyers who will face stiff competition from buy to let buyers.
First time buyers have now struggled for many years to get onto the property ladder in many cases, and this challenge will be one in a long line of problems that have faced the average first time buyers. In the years leading up to 2007 the high price of property affected the ability of non-homeowners to get onto the property ladder.
At the end of 2007 property prices started to fall but the credit crunch meant that mortgage availability dried up, causing different problems for first time buyers. Now that mortgages are starting to return it looks as thought buy to let investors could cause yet another problem for this group.
The report said that many lenders saw first time buyers as a higher risk than buy to let investors, and an official from the Manchester Building Society said: “FTBs do not have a proven track record of meeting mortgage repayments. We think that grade A buy-to-let is a much lower lending risk.”
- Housing market still in bad state say house builders Over recent months the housing market has been going through turmoil, and the sale of properties has plummeted. This is because credit conditions have become much tighter, and this has resulted in fewer people being
- Landlords falling into serious arrears According to a recent report a rising number of landlords are falling into serious arrears with their buy to let mortgages, with the number of landlords now three months behind with their repayments rising to
- Many landlords deciding to sell up According to a recent report an increasing number of landlords in the UK are deciding to sell up, with a number of factors thought to be responsible for this increase. The Royal Institute of Chartered
- Deposit scheme suffers according to landlords According to a recent report many landlords and tenants are concerned that a government deposit scheme that is supposed to protect the deposits of tenants will end up suffering as a result of measures brought
- Homeowners turned landlords feel the financial pinch Over the past year or two, since the downturn of the housing market and the problems that have hit the mortgage market, many people that were hoping to sell their homes have found that they
Comments
Got something to say?