Buy-to-let house market 'blooming'

Buy-to-let marketThe buy-to-let market is "blooming", with 100 more deals on offer than a year ago and lower typical interest rates, research has found.

There are 486 buy-to-let mortgage deals on the market, up from 386 last February, comparison website Moneyfacts said.
The heightened competition among lenders to attract landlords has also seen the average buy-to-let rate drop from 5% this time last year to 4.79%.

The rental market saw a boom last year as those who could not get on the property ladder found themselves trapped in the rental sector.

Lenders, who might previously have seen this area as more high risk, have been expanding their ranges to reflect the increased interest in the market.

Meanwhile, the housing market generally has remained flat, with Nationwide reporting that prices dipped by 0.2% in January and highlighting the lack of buyer demand as people struggle to raise a deposit.

Would-be buyers could face an even tougher time trying to raise a mortgage in the coming months as lenders are expected to tighten their borrowing criteria amid weak economic conditions.

Louise Holmes, spokeswoman for Moneyfacts, said the buy-to-let area is "blooming" with a widened choice for landlords.

She said: "During the peak of the credit crisis the number of buy-to-let deals shrank considerably as lenders saw it as a high risk area of the market. Many aspiring homeowners have had their property dreams dashed due to strict lending criteria and large deposits, meaning the only option left is to rent.

"This increase in demand for rental properties has resulted in a degree of competition returning to the buy-to-let sector, giving it a well-needed boost. These latest figures, particularly a reduction in the average rate, should make pleasing and encouraging reading for landlords and property investors."
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