March 14, 2009
Buy To Let Funding To Improve Shortly
After months of negative news and a relatively gloomy outlook for those seeking loans in the buy-to-let sector, several British banks are now offering something positive to look forward to, as they promise to make mortgages and other loans more widely available.
The nationalized Northern Rock Bank, for example, has decided to overturn a previous decision and offer approximately 14 billion pounds in mortgages during the current calendar year, as well as in 2010. Shortly after this announcement, the Royal Bank of Scotland also confirmed that it would open its doors to mortgage seekers, making available a total of 1.7 billion pounds. The only caveat, according to media reports, is that RBS will only be offering these news mortgages and buy-to-let loans to clients based in Scotland. Part of RBS’s strategy is to provide money to both first-time homebuyers—including up to 90 percent of a residential property’s value—as well as funds to [teg-tec]buy-to-let[/tag-tec] businesses.
Paul Geddes, chief executive at RBS, was quick to point out that from now on his bank would be “more than ever, open for business.” Financial experts, however, note that RBS and other banks offering new loan possibilities should focus their efforts on those who have found it most difficult to secure funding over the past few months, namely buy-to-let investors and prospective homeowners who may have a steady monthly income, but do not have much money saved up in banks. Observers believe that making funds more readily available for the residential rental industry could help boost Britain’s struggling UK housing market and pave the way for a future recovery.
