July 17, 2009
Buy To Let Mortgage Deals - Keep Your Eyes Peeled
With experts predicting that it could take some time before the mortgage market in the UK begins to recover, some buy-to-let property investors may feel it is pointless keeping their eye out for the best deals.
With much less options to choose from, they might believe the chances of finding deals that are markedly better than the ones they already have are remote. Such feelings could also be influenced by the current situation involving the Bank of England's base interest rate. After several months at an all-time low of 0.5 per cent, many are forecasting that it could be well into next year before there is a change. Indeed, speaking ahead of tomorrow's Monetary Policy Committee announcement, economist Michael Baxter of Defaqto said there is no benefit in making further cuts, while "it is certainly way too early" for an increase.
It is this issue with the base rate and how it is so low relative to the long-term average that was pointed to by the chief executive of the Young Group this week as the reason why his organisation has recorded a substantial drop in the number of buy-to-let investors monitoring their mortgage options regularly. The Young Index for the second quarter of 2009 revealed that 24 per cent of residential property investors are assessing their mortgages every six months or less. This compares to the 80 per cent who were doing so at the same time last year.
However, Neil Young suggested that those who are no longer checking the market so regularly could be making a mistake. "Just because there are fewer mortgage products available, investors shouldn't take their eye off the ball," he remarked. "Arguably, now is the time to be paying more attention to the mortgage market to avoid the risk of losing out when base rate inevitably rises in the future."
"Rates for new mortgage products can change rapidly and to make the best of their own specific circumstances borrowers need to keep on top of the market," Mr Young added, explaining that it generally only takes a few days for the best deals to be fully subscribed once they have been launched.
Other results of the Young Index appeared to be more positive. Over three-quarters of those asked expect the UK's economy to be growing again by June 2010, while the majority believe growth will take place during the first quarter of the year.
