Rise in FTB activity as demand for BTL mortgages decline

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Recent statistics from the Mortgage Advice Bureau have found that demand in the BTL sector is beginning to fall in line with an increase in the number of first time buyers purchasing their first property.  However, the Mortgage Advice Bureau have said it is too early to determine if this trend will continue

The average price of a property purchased by FTB’s fell by 2.7% in the first month of the year suggesting there is not as much competition for the same property from BTL investors.

The price of BTL properties acquired has also fallen year on year indicating a lower level of demand within this sector and suggesting the possibility that investors will begin to look at investment properties in cheaper priced areas.

The Council of Mortgage Lenders recently reported a 20% decline in BTL lending year on year and a growth of 8% year on year in FTB activity.

Head of Lending for Mortgage Advice Bureau, Brian Murphy, commented: “With lenders now operating on a more stringent basis when underwriting buy-to-let borrowers, this is levelling the playing field between buyers who are borrowing to fund the purchase of their first home and investors who are borrowing to fund investment.

What’s also interesting to note is that the average first-time buyer LTV has increased slightly, which could perhaps be a reflection on the fact that lenders are being slightly more flexible and accommodating in terms of assessing affordability, given current levels of continuing ultra low interest rates. With some lenders introducing 95% LTV rates in January to ‘pick up the baton’ from the Help To Buy mortgage guarantee scheme which ended in December, this may be another contributing factor to the increase in activity from this sector.

It’s too early to tell if these initial observations will translate into an ongoing trend in 2017, but any increase in first-time buyer activity is a welcome sign as this, historically, has had a positive ripple effect across the rest of the market.”

Full article available on Property Reporter: http://www.propertyreporter.co.uk/property/ftbs-fill-the-gap-as-btl-demand-cools.html

RentPro has been providing letting agent software for over 10 years. Our property management solutions are available in a number of plans for landlords and letting agents alike


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