Andy Young of Landlord Centre, one of the U.K.'s biggest BTL mortgage suppliers, shares his views on the current state of the mortgage market and why he thinks that it is definitely coming back to life.

Filmed on location at the stunning Cotswold Water Park Hotel, South Cerney, Gloucs, who we would like to thank for their kind hospitality and use of the hotel as a video location.

Great interview Vanessa,

I look forward to hearing more about Property Tribes Mortgages!

I've long tried to shout about how buy to let mortgages are more available than many people seem to realise and how much things have moved on since 2008...

And how people should stay in close contact with mortgage brokers who are the experts that can help us get the mortgages which enable us to buy more property.

Well done.

Angela

Thanks Angela.

Yes, I confess to being one of those people who was still thinking that the BTL mortgage market was very limited and that decent products were few and far between.

Speaking to Andy yesterday was a real eye opener on that score.

Property Tribes mortgages will be coming very soon and Andy will be providing weekly up-dates as to new/exclusive products so that members will always have the very latest mortgage intelligence and access to the best possible products.

We hope this service will be valuable to members and help them always find the best product for them and their property.

As mentioned above, we will shortly be launching Property Tribes Mortgages through the Landlord Centre.

As part of our relationship, we will be providing weekly mortgage market intelligence and reports and Q3 is now available below.

Property Investor Profile – Q3 2012

Landlord Centre, the online buy-to-let mortgage specialist, produces the Property Investor Profile to track developments in the UK buy-to-let mortgage market. Its findings for Q3 2012 highlight several interesting trends for the sector, including:

• Average fixed rates have gone down
• Tracker rates still more popular
• Average LTVs continue to increase
• Terraced houses and student tenants provide greatest rental yields

Buy-to-let mortgages in quarter three 2012
Q3 2012 Q2 2012 Change during Q3 2012
Applications

Average loan size: £138,846 £158,435 -£19,589
Average rental yield: 6.61% 6.60% +0.01%

Offers

Average chosen fixed rate: 4.88% 5.06% -0.18%
Average chosen variable rate: 4.40% 4.10% +0.30%
Average loan to value (LTV): 72.60% 67.30% +5.30%

Andy Young, chief executive of Landlord Centre comments on the Profile’s findings:

“The buy-to-let mortgage market has continued to improve throughout 2012 with more lenders and products now available for landlord clients to choose from. This has led to greater competition in the market and there are currently some excellent deals available. There has also been some softening of criteria by some lenders, increased LTVs and a lowering of rates.

These positive developments are good news for existing landlords looking to develop their portfolios or those considering buy-to-let investment for the first time".

Average fixed rates have gone down but trackers still more popular

“In terms of the type of product that landlords are choosing, there still appears to be a clear preference for variable rates over fixed rates. During Q3 2012, 60% of buy-to-let applications received by Landlord Centre were for variable rates compared with 40% for fixed rates. The average fixed rate chosen during this period fell from 5.06% to 4.88% and the average variable rate rose from 4.10% to 4.40%.

“With variable rates still cheaper than fixed rate products, more landlords are opting for lower initial rates, which may reflect a growing consensus that interest rates will continue to remain low for some time to come. The increase in the average variable rate can be attributed to the availability of higher LTV products which are also priced higher.

“In terms of the split between purchases and remortgages, it was absolutely even during Q3 with 50% of applications received for each type. This demonstrates the keen appetite amongst landlords looking to take advantage of the excellent remortgage deals available to release equity from their existing properties, and those looking to expand their portfolios with the purchase of additional properties.

Average LTVs continue to increase

“As the buy-to-let mortgage market has expanded more lenders are now offering higher loan-to-value (LTV) products. There is a wide range of rates available up to 80% LTV and Kent Reliance still offers 85% LTV mortgages in its core range and for HMOs, limited companies and student lets.

“The provision of higher LTV finance has, unsurprisingly, resulted in a noticeable rise in the average LTV for buy-to-let loan offers received by Landlord Centre during quarter three (72.63% compared with 67.30% in the previous quarter).

Terraced houses and student tenants provide greatest rental yields

“Average rents have stayed strong so far during 2012 as tenant demand remains high, and the average monthly income was again over £1000 a month during quarter three. However, there is always a wide variation in rental income depending on property and tenant type. According to the Index, student tenants provide the highest rental yields for tenant type (often from HMO properties) with an average yield of 8.23%.

“Terraced houses provide the highest rental yields for property type at 7.28%. Students in terraced houses on average provide a rental yield of 8.34%. Given that the average rental yield overall was 6.60%, landlords may look to the student segment of the rental market to maximise their returns.”


Property Investor Profile
The results are based on a sample size of 562 applicants for buy-to-let mortgages via Landlord Centre during July, August and September 2012.

Buy to Let Market is booming with more lenders coming in all the time, more and better products. Its residential that is suffering, which is why we currently don't actively seek regulated residential business.

Excited to see what "Property Tribes Mortgages" is going to be. A good decision for Property Tribes to go down this route, I do know off a better supplier if/when Landlord Centre does not deliver.

Quote:What fees do you charge for your buy-to-let service? Landlord Centre does not charge a broker fee for its buy-to-let mortgage service.

Interesting to see how this effects quality of service, treating customers fairly relating to product selection. I guess though as Landlord Centre does not display is its FSA registration route it's able to skip over standard industry practice.

Hi Adam,

It's probably best if Andy Young addresses the points raised in your post. I have alerted him to this thread .

All will be made clear when we launch the service, but thank you for your interest ahead of our launch announcement.

(06-11-2012 06:08 PM)Adam Hosker Wrote:  Buy to Let Market is booming with more lenders coming in all the time, more and better products. Its residential that is suffering, which is why we currently don't actively seek regulated residential business.

Excited to see what "Property Tribes Mortgages" is going to be. A good decision for Property Tribes to go down this route, I do know off a better supplier if/when Landlord Centre does not deliver.

Quote:What fees do you charge for your buy-to-let service? Landlord Centre does not charge a broker fee for its buy-to-let mortgage service.

Interesting to see how this effects quality of service, treating customers fairly relating to product selection. I guess though as Landlord Centre does not display is its FSA registration route it's able to skip over standard industry practice.

Hi Adam....in answer to your questions (i) there will be no Broker fees charged for this service. landlords will be able to search for a mortgage that meets their requirements on-line on the 'Property Tribes Mortgages' website and will have access to the dedicated Mortgage Helpline, staffed by Buy to Let mortgage experts. (ii) Landlord Centre only deals with non-regulated Buy to Let mortgages and does not need to be regulated. It is, however, the 'direct to landlord' sister company of TBMC Services who is authorised and regulated by the FSA and has won 'Best Buy to Let Broker' at the Mortgage Strategy Awards for the past 2 years. (iii) Product selection/bias and TCF is not an issue as landlords will select the best product themselves from the on-line mortgage sourcing system - with access and support from experts who will answer any queries/questions etc.

Ahh, Your the same Andrew whom is director of TBMC Services whom is authorised by the FSA for regulated business. I did wonder, as you know with Buy to Let being unregulated but lenders Do Not Talk to companies are not authorised.

We are changing mortgage networks and I did look at TBMC when researching our options. Decided to go with HLP in the end.

I look forward to testing the public sourcing system that enables the end user to see the full facts and decide for themselves which product is most suitable to their requirements.

Britain is issuing the largest number of 'landlord loans' since records began, official figures have revealed today.

One in eight mortgages now a buy-to-let loan deal - an all-time high, the report said.

Of the 11.3 million mortgages in this country, 1.44 million are buy-to-let loans, rather than standard residential mortgages.

Read the full article >>> here.

Please note that there is a clearer view of the Q3 market intelligence with graphs etc >>> here.

After gloomy figures about September's plunge in mortgage lending from the Council of Mortgage Lenders, tentative hopes have picked up for the market.

The Mortgage Advice Bureau is reporting this morning that October was the busiest month for mortgage applications since before the financial crisis.

While a major caveat is that MAB reports only on applications and not on approvals, the company – using data from 500 brokers and 800 estate agents – said that mortgage application activity was up by 22% on September and was 31% higher than the start of the year.

Read the rest of the story >>> here.

Seems the BTL mortgage market is definitely coming back to life.

Related discussion:

Property Tribes Mortgages launches with a new range from Mortgage Trust