Demand for mortgages by buy-to-let landlords has soared over the past year, highlighting the growth in the sector.
Increasing numbers of buy-to-let mortgages are being offered by lenders in response to the skyrocketing demand, with many offering better rates on lower deposits. According to the Council of Mortgage Lenders, buy-to-let lending for property purchases rose by 18.6 per cent last year compared to the year prior. The last quarter of 2013 saw buy-to-let lending sitting at 20 per cent higher than the third quarter of 2012.
Head of mortgages at the Post Office, John Willcock, confirmed to the Financial Times: “There has been a significant increase in the demand for buy-to-let mortgages in the past 12 months as more borrowers consider the rental market.”
The reason for the increasing growth in the sector has been put down to UK landlords looking to expand their property portfolios. According to the most recent BM Solutions/BDRC Continental Landlord Panel, a third of landlords are aiming to add another buy-to-let property to their portfolio over the coming year.
The panel also showed that the majority – 80 per cent – of landlords were able to make a profitable full-time living from letting their properties. The figures also showed that, despite rents rising, the average amount owed by tenants in arrears dropped to a three-year low of £1,499.