The
buy to let mortgage market is showing rapid growth, as new figures from
Mortgages Direct reflect a 50 per cent increase in new
buy to let mortgages.
Of all customers looking to
find a mortgage, 12 percent hope to secure a buy to let mortgage.
"The renting market is fairly buoyant in this current climate, with many potential homeowners sitting on their hands," commented director of Mortgages Direct, Peter Gladdy.
He added that landlords are taking action in response to the demand and to the upward trend of rents.
"Also the imminent change to Sipps, where residential
property will soon become a valid Sipp
investment is already boosting the number of
buy to let mortgages, as investors are realising the opportunity to boost their pension funds," Mr Gladdy added.
Buy to let
mortgage holders are also showing increased optimism. Paragon Mortgages reports that buy to let mortgage holders hope to see their portfolios' value increase by an average 5.5 per cent this year.
From last month, the number of mortgage borrowers that chose interest-only repayments on their mortgages has surged from 19 per cent to 31 per cent.
Mr Gladdy said this shows mortgage holders are "still feeling the squeeze on their finances", but warned against this practice..
"It is surprising that more borrowers are opting for interest only repayments. This is not advisable and borrowers need to ensure that a comprehensive repayment method is in place," he said.
