BTL borrowers and aspiring buyers go head-to-head on price

The average property valuation among aspiring buy-to-let borrowers fell by 6% from £225,234 in Q2 2014 to £212,362 in Q3 2014, while the average property valuation among aspiring homebuyers rose by 4% from £205,484 to £214,615.

It leaves a gap of just £2,253 between the properties targeted by would-be homeowners and BTL borrowers in Q3 2014, down from £19,750 in Q2 2014. Aspiring BTL borrowers also had an average loan requirement of £139,285 in Q3 2013 – 9% less than the £152,539 sought by aspiring purchase borrowers.

Brian Murphy, head of lending at Mortgage Advice Bureau, said:

“A drop in the average property valuation among aspiring BTL borrowers suggests that appetite for investing is focusing more on the lower end of the property market. Like homeowners, existing landlords will also have benefitted from recent equity gains and this may be helping them put up more of a deposit and scale back their borrowing needs.

“While the supply of housing is stretched, there will always be a sense of competition for property. The country needs a healthy rented sector to meet the full range of consumer needs, particularly among people who may be studying or need the flexibility to move for work, and positive actions to meet house building targets will give both homeowners and landlords more room to breathe.”