RSS FeedsLandlords will be paying larger deposits on Buy-to-Let mortgages
1/04/2008
Banks have previously lent borrowers up to eighty-five per cent when it comes to buy to let properties. It seems that this may no longer be the case with certain financial organisations as news earlier today revealed that both the Natwest and the Royal Bank of Scotland are increasing deposits on buy-to-let mortgages. As of the end of today landlords will have to pay anything between 15 to 25 percent of the value of the property.
This is another move by yet another financial organisation in order to help reduce the risk element with all the recent issues surrounding the credit crunch and all of this comes at a time where house prices are falling.
The number of buy to let mortgages has fallen considerably since the UK saw the start of the credit squeeze at the end of last year. Figures suggest that buy-to-let mortgages have dropped by 63% since the start of the credit crisis end of last year. According to Moneyfacts.co.uk figures fell from 2990 in April of last year to 1116.
"The credit crunch has meant fewer organisations are lending because securitised lenders are having difficulties securing funds at a competitive enough rate to re-enter the market. This means the lenders remaining are receiving a higher number of applications and as result have been lending in elevated volumes. We view these measures as a short term mechanism to lessen the volume of applications there are receiving, allowing them to achieve lending volumes they are more comfortable with” Jonathan Moore of Mortgages for Business, the buy-to-let broker quoted today.