Not much left for Buy to Let landlords
Article source: www.bridgingandcommercial.co.uk
It has been revealed recently that quite a number of United Kingdom based mortgage lenders are hastily cutting down on a number of the available mortgage product options for buy-to-let landlords and property investors.
For example, just last week we saw the giant, but troubled mortgage lender, the Bradford & Bingley, pull back its complete range of buy-to-let mortgage products through its subsidiary Mortgage Express.
Even though the move was on a temporary basis all together, it was matched by other mortgage providers including the Nationwide Building Society’s subsidiary mortgage lending divisions, UCB Home Loans and The Mortgage Works.
Cheltenham & Gloucester, NatWest (part of the Royal Bank of Scotland Group) and the Principality Building Society, which are among the few remaining mortgages lenders offering a good range of buy-to-let mortgage products, have revealed that, not unsurprisingly, they are in the rigorous process of bringing in more stringent lending criteria. Much of this added caution can be attributed to the lack of liquidity in the banking system. In reality mortgage lenders simply do not have the cash available to be able to lend out and what little finance they do have available has often come at a high premium. This has resulted in the withdrawal of many mortgage products, the introduction of ones with higher lending charges and the overall tightening of mortgage lending critiera.
Melanie Bien, a market analyst from Savills Private Finance, however said that quite a number of landlords will see out the crunch as long as they contact a mortgage broker as soon as their present loan period comes to an end despite the stringent regulations in force.
In a statement to the Guardian newspaper, Melanie Bien said that there is a high possibility of falling interest rates by the end of this year, and advised that all those who can afford to be exposed to fluctuations on a base-rate tracker mortgage product may see a steady fall in their monthly mortgage payments.
She further added that "The outlook is more difficult, the majority of landlords will survive."
About the Bradford and Bingley
The Bradford and Bingley savings and deposits and retail branch network are, as of the 29th of September 2008, part of the Abbey National. The Abbey is a member of the giant Spanish banking group, Banco Santander. With over 70 million customers world wide and more branches than any other international bank, the customers of the Bradford and Bingley, after its recent financial troubles, can now rest assured as the bank is now under the ownership of the Abbey National and the guardianship of Santander.
The mortgage book of the Bradford and Bingley remains in hands of the UK Treasury and is likely to do so for the foreseeable future. The Government will, most likely, wait until the mortgage market recovers and then sell the mortgage book back to the financial sector, hopefully for a premium.
About Savills Private Finance
Savills Private Finance is the specialist mortgage division of the Savills PLC, one of the UK largest property consultancies. They are specialists in 6 and 7 figure mortgages for wealthy individuals for whom time is precious. Formed in 1997 to help advice clients when dealing with large and sometimes complex mortgage products, Savills Private Finance has a network of offices and mortgage advisors across the United Kingdom.
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