More action is needed to kick start buy-to-let

But alone, will not be enough to kick start the buy-to-let market and should be met with caution. Following the recent launch of a new range of products, buy-to-let investors can now access mortgages up to 85 per cent of a property’s value.

Steve Bolton comments:

“Whilst we welcome news that there is a higher LTV product available on the buy-to-let market, pointing to a positive change in mortgage lending, investors need to be aware that the revert rate of this particular offering is 5% above LIBOR.

"With a bank base rate rise looking imminent, the first investors to come off their fixed rate of 5.99% in two years time could find themselves paying a post-fix rate of anything up to and beyond seven per cent.”

With this in mind, after the fixed period comes to an end in two years time, investors may wish to re-mortgage to another product. However, this option will rely on a greater number of lenders offering competitive 85% loans to value products, otherwise investors may face having to put in more capital.

Steve adds:

“My recommendation is to wait. This is a potentially good sign, but as demand increases we would hope other lenders will look to cash in on this profitable market.

"This in turn will generate greater competition and therefore lower rates for borrowers, and that will be the better time for investors as well as giving the UK housing market the push it needs.”