Buy-to-let mortgage choice shrinks, but for how long
Released on: October 24, 2007, 11:21 am
Press Release Author: Jim watson
Industry: Real Estate
Press Release Summary: Those looking to invest in property buy-to-let in the UK may be continuing to do so in confidence that the long-term benefits of such a purchase far outweigh any current difficulties such as higher interest rates.
Press Release Body: Those looking to invest in property buy-to-let in the UK may be continuing to do so in confidence that the long-term benefits of such a purchase far outweigh any current difficulties such as higher interest rates. This may be just as well, given the Bank of England monetary policy committee\'s apparent desire to sit tight on the 5.75 per cent base rate, with today\'s news that David Blanchflower was the sole member to vote for cut this month following two unanimous decisions to freeze the rate in August and September. Yet those looking to get a mortgage for buy-to-let may find themselves sharing in one of the negative developments in the mortgage market. Following the recent turbulent period in which the words sub and prime have appeared on the front pages nearly every day, credit has crunched and one of Britain\'s biggest mortgage lenders had to be bailed out by the Bank of England, the number of mortgage products has fallen markedly. Finance website Moneyfacts.co.uk has provided a breakdown of the 40 per cent decline since July in the number of mortgages of all kinds available on the market. The figures show that the reductions are in all sectors, both residential and buy-to-let, in both sub-prime and prime categories. In the case of buy-to-let, 72 per cent of sub-prime mortgage products have been withdrawn, but even in the prime market there are now 20 per cent less. Both of these reductions are higher than the residential market, although the overall pattern is one of a \"discernible lack of innovation\", according to Julia Harris, a mortgage expert at the website. She added: \"It would appear nobody is prepared to pop their heads over the parapet and make distinctive changes, it\'s a wait and see game.\" Wait and see, of course, is exactly what the MPC appears keen to do, with the minutes of the October meeting, published today, showing that the committee was keen to wait for the November inflation report in the anticipation that this would give a clearer picture of the future prospect than that which was contained in the August report.. Many have seen this as a sign that a rate cut could take place as early as next month, with Global Insight economist Howard Archer saying: \"The October MPC minutes indicate that a November interest rate cut is a genuine possibility.\" Should such an event take place, then perhaps the \"wait and see game\" to which Julia Harris referred will end sooner than expected, offering buy-to-let investors more property mortgage choice and new products.
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