Buy to Let
Buy to let continues to boom
Demand for rental property is growing so quickly that the buy-to-let market is set to expand by 40% over the next 10 years.
Stephen Leonard, director of mortgages at Alliance & Leicester, said: “Demand for rental property has been growing steadily in recent years and returns on buy to let have increased.
“The growth is expected to continue as the number of tenants rises further.”
In the last six months, a growing number of lenders – including Alliance & Leicester – have increased their buy-to-let products to 90% loan-to-value (LTV).
This means buy-to-let investors can bag a property with just a 10% deposit.
According to research by Moneyfacts, five years ago, the average LTV was around 75%.
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Alan Harper, senior analyst at Moneyfacts, said: “Not surprisingly, lenders are pricing products with higher LTVs at increased margins to reflect the great risk.
“Alliance & Leicester, Freedom Lending and Platform have all priced the initial pay rate of their prime 90% products higher than the equivalent products available only to a maximum of 75%.”