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First time buyers find lending criteria too tough
Currently landlords are experiencing increasingly unhelpful lending conditions as mortgages for the buy to let sector require low loan to values and often unrealistic rental yields to cover the mortgage repayments.
However, although buy to let mortgages have hit a wall as far as most small time landlords are concerned, experienced landlords are increasing their property portfolios. Paragon has noted that since it began recording the question of whether a buyer was a first time purchaser of buy to lets in 2001, the number of new buyers entering the landlord market has now at its lowest level.
According to recent research compiled by Paragon Mortgages, first time buyers entering the buy to let mortgage market are overshadowed by the increase in experienced landlords dominating the market.
First time landlords accounted for 10.6% of business which is a decrease of almost 8% in the last 3 months of 2007. Most mortgage brokers are expecting their core landlords to increase their property portfolios with a general cut of around 1.7% less business than the third quarter of 2008. The managing director of Paragon, John Heron, said “The number of first time landlords entering the market is at its lowest level and perhaps that is a good thing in the current economic environment”.
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