News: Developer deals boosting buy-to-let investment

The June best buy mortgage tracker from Hamptons International Mortgages has revealed that buy to let mortgages have seen a substantial increase over the last month.

Their data shows that buy to let purchases increased from 12.33% of all Hamptons mortgage business in May to 16.60% in June. Buy-to-let remortgages are also up from 13.01% in May to 17.45% in the latest figures.

Last minute incentives from developers seeking to maximise their cashflow at the quarter and half year end have encouraged investors into the market. Buy to let remortgaging levels have also risen in the same period as investors release some of the equity from the last few years property price growth to reinvest in new buy to let properties with attractive developer incentives.

In addition, lenders have been keen to encourage buy to let borrowers with higher loan to value ratios after many of them have recently relaxed their rental calculations and some are now even offering 90% loan to value buy to let mortgages. Hamptons records a rise in LTVs for buy to let purchases and remortgages to 74.02% and 80.02% from 69.81% and 79.78% respectively.

Over the same period home purchases have fallen from an annual high of 50.68% last month to 45.96% in June and remortgages from 21.58% to 18.72%. The dreaded "World Cup effect", when viewing (and therefore purchase) levels drop as the national team progresses through the campaign, appears to have been muted by England’s early exit in the quarter final and Hamptons expects a quick recovery in the property market.

Jonathan Cornell, Technical Director at Hamptons International Mortgages commented: "Forget the summer sales on the high street. To pick up a real bargain you should be looking at the property market!"

"The end of a quarter usually signals some crazy offers from developers looking to boost their cashflow at this critical time in the financial calendars. Therefore there are cashback deals and rental guarantees aplenty for the savvy investor."

"The booming buy to let market we are seeing at the moment is also a reflection of lenders’ eagerness to attract investors by offering higher loan to value ratios and increasingly competitive rates. The residential mortgage market is now so competitive that lenders are increasingly forced to look at alternatives such as buy to let market to make some profit. Buy-to-let mortgages continue to look better value than ever."

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