One of the most significant factors for a healthy mortgage market is the loan-to-value percentage (LTV). This is the proportion of the value of a property that a lender will loan to you. The rest you have to have up front as a deposit.
The less the lenders will loan, the more cash you need to begin with. When lenders reduce the LTV on their mortgages, homebuyers without a big deposit are stuck. First time buyers in particular have no way of getting the loan they need.
That’s why we rejoiced back in the summer when some lenders reintroduced 95% mortgages, causing others to improve the competitiveness of their 90% products.
A couple of months later Aldermore came up with a limited no-deposit-required mortgage for first-time buyers, which works by requiring a family member to act as a guarantor.
These are encouraging signs, but until now the news has not been so good for landlords wishing to borrow for buy-to-let. Is that about to change? Kent Reliance is now offering a buy-to-let deal at 85% LTV.
It shows how reluctant lending still is for landlords that this Kent Reliance mortgage is the only one at 85% LTV for buy-to-let. But it can only be a positive step.
While investors should not underestimate the costs associated with becoming landlords, this deal is what the market desperately needs. It is certainly a step forward for the buy-to-let sector.
The 85% buy-to-let mortgage is likely to be popular and only limited funds are available. If you are interested, let us know as soon as possible, in case it is not available for long.
Limetree is happy to advise you on buy-to-let mortgages. Talk to us today.