Buy To Let Loan Boom At Cost Of First Time Buyers
Since the credit crunch, the home owner loan market in the UK has struggled to keep its head above water, as lenders tighten criteria on loans and borrowers find it increasingly difficult to be accepted for loans due to restrictions and low loan to value levels.
However, one area of the property loan industry which has seen significant growth over the course of the past twelve months, is that of buy to let loans, as property investors and professional landlords take advantage of cheap loan rates and low property prices, as well as the growing demand or private rented property.
Whilst this might be great news for property investors and landlords looking for a good buy to let loan deal, many of the properties they are snapping up as bargains are exactly the same properties which first time buyers would be looking at.
With the number of buy to let loan products increasingly significantly over the course of the past twelve months, giving landlords and property investors a wide range of cheap loan options, many would be first time buyers are finding themselves losing out on a suitable property, even if they have a large deposit and are able to get the loan they require.
The number of new buy to let loan deal has just passed the 500 mark, thereby increasing competition between lenders forcing them to offer cheap loan deals, whereas the first time buyer loan market is not enjoying such a luxury, with many still struggling to get the loan they need.
Michelle Slade of Moneyfacts said “The properties that landlords are buying are, in many cases, those that would also be a target for first time buyers. This poses a further problem for first time buyers who are already struggling to get on to the property ladder.”
