Buy to let industry slaughtered by credit crunch

The specialist BTL broker Mortgages For Business is reporting that the new criteria changes amongst the UK’s BTL lenders will affect funding for newly renovated properties and the deposit size now required…

First Rung - 28 March 2008

New builds; flats or houses built or converted in the last twelve months, have been a particular cause of anxiety for buy to let lenders. It is now common for lenders to refuse to lend on this type of property. Capital Home Loans are the latest organisation to decline to lend on new builds including newly converted properties.

Jonathan Moore, head of marketing at Mortgages for Business, comments:

“New builds is the one area of concern in the sector, particularly in some city centres where supply is currently outstripping demand. It is essential however not to judge the whole buy to let investment proposition on the performance of new builds. Established properties and particularly HMOs and flats above commercial properties provide good long term yields. The fact that renovated flats and houses in the last twelve months are classed as a new build may be of surprise to many investors.” - full article