Heightened BTL confidence

Amidst the emergence of new entrants, more products and a degree of renewed confidence returning to the buy-to-let sector, TMA’s May Distribution Indicator focused on how these factors were reflected in the intermediary marketplace.

When questioned about current market conditions compared to those experienced in May 2010, 76% of DA’s said that they were more confident in regards to the future of the buy-to-let sector with 24% suggesting they were still not confident regarding its future.

Results from the survey also found that 65% had experienced an increase in buy-to-let enquiries over the last three months in comparison with 35% who stated that they had not.

In another section of the TMA Distribution Indicator when posed the question; with the average age of home ownership rising, do you think potential buyers are turning to the rental market through choice rather than necessity, 62% stated they didn’t think that this was the case.

And 38% of respondents said they thought more people were making this lifestyle choice rather than because of obvious funding and affordability issues.

Just over half of those surveyed (53%) agreed with the sentiment that buy-to-let investors with large cash deposits are replacing first-time buyers, as risk-averse lenders are drawn back to the buy-to-let sector and away from the high loan to values.

47% disagreed with the aforementioned sentiments.

The TMA Distribution Indicator is part of a strategic gathering of feedback and views in regard to current market conditions undertaken by the TMA mortgage desk.

A cross section of extensive interviews takes place over the course of a month and the responses are gathered to highlight any potential fears, opening or developments in the market which TMA will look to address in the future.

Phil Whitehouse, Head of TMA, commented:

“The buy-to-let arena certainly seems to be gaining in momentum with a greater number of products coming onto the market and criteria loosening slightly. This has given rise to a much more upbeat outlook towards this important sector which is reflected in these findings.

"However, there are issues holding the buy-to-let market back with funding restrictions still apparent and arrears levels that could be better. So in terms of recovery it remains prudent for the sector to walk before it can run.

“But, back on a positive note, demand shows no sign of diminishing and some of the larger name lenders are continuing to raise their activity levels within the intermediary market which can only be a good thing.

"It will be interesting to revisit these results later in the year to see if this positivity has increased but in the meantime I expect to see this sector continuing to build on the sound if not spectacular foundations that are being laid.”