The fundamentals for a strong buy to let market have improved over the duration of this year. Rental yields are increasing, repositions are falling back, tenant demand is strong, the emergency budget gave a nod with its corporation tax cuts, the large buy to let companies of old have commented on lower arrears and increasing profitability and landlord sentiment is broadly positive. Yes there is still nervousness surrounding the spending review and public sector cuts, but with the near extinction of council and social housing, people need to live somewhere.With this in mind, you would expect to see a reasonable but cautions buy to let lending market, and we have seen some slight improvements this year including at least 3 new lenders, one 80% LTV product (the maximum elsewhere is 75%), slight resurgence of HMO and limited company products and one ?refurb to l gold for cash et’ product. All of these additions have been widely welcomed by mortgage brokers and landlords alike.The Buy To Let market as a whole however is lagging behind the improvements in the residential mortgage market and the reason seems to be lack of competition. The victims of the crunch were many: Mortgage Express, TMB, Paragon, Bristol and West , Bank of Ireland and towards the end Northern Rock, all of whom were contributors to the market. The survivors are The Mortgage Works (Nationwide’s specialist lender) and Birmingham Midshires (Lloyds Group) Other bit part players include Natwest, Coventry, C&G and a few mutuals and building societies – none of which have significant appetite or capacity. The Market is dominated by the ?Big 2′ and this 2 party monopoly is keeping costs high (3% lenders fees are the norm) and maximum loans are broadly capped at 1m.
