Buy-to-let mortgages booming, index finds

The buy-to-let mortgage market is booming despite disruption in the financial markets, according to the latest mortgages index from Paragon.

Landlords are seeing growing tenant demand and rising yields, which is fuelling their desire for more properties and consequently more mortgage borrowing, the index concludes.

In addition, residential landlords are benefiting from housing market conditions that have hampered access to the property ladder for many buyers, a spokesman said.

Nigel Terrington says that activity in the secured lending market has been muted over the summer and added that "when investors return in force, credit quality will be top of their agenda".

"Given the superior, indeed exemplary, credit profile of buy-to-let, we can expect them to favour paper backed by low-risk mortgage assets originated by specialist lenders," he added.

According to data from the Council of Mortgage Lenders, buy-to-let arrears in excess of three months average out at 0.63 per cent, compared with 1.06 per cent for the overall mortgage market.

back