Rents and Mortgage Lending Soars As Livingstone Warns of Need for Quality

This week saw more research which suggests that rents throughout the United Kingdom show no sign of decreasing. A recent study by LSL Property Services further highlights the continued increases in the private rental sector. Rents rose to £718 a month in September, a new record high recorded in the East Midlands. This figure tops the previous record of £713. One reason cited for the persistent rise is the ever growing availability of buy-to-let mortgage products. Santander are the latest company to announce they will once again be offering buy-to-let lending for landlords looking to take advantage of rental demand. The largest bank in the eurozone previously operated in the buy-to-let market and fears have been expressed that the firm are rushing into re-releasing their product. Bill Gray, deputy chief credit officer at Santander was quick to quash these fears stating “If any of you remember when we used to be in the buy-to-let market, you will also recall our service was dreadful. It has taken us three years to get our service back up to the standard it is today and we don’t want to go out into buy-to-let until we have a credible proposition, but we won’t make the same mistakes again – we will be in the market as soon as we can.” The announcement comes at a time when Barclays have stated their intent to quadruple buy to let lending, while the Royal Bank of Scotland are also rumored to be considering entering the fray.

The increased supply of buy-to-let mortgages will come as good news to private landlords. Coupled with the fact that gross mortgage lending is up 7% this year; it would appear as though now is the time to increase your portfolio. Buy-to-let lenders have had a positive response to the news. Simon Clark, of mortgage broker Jacobs Payne Parry Financial Services claims mortgage applications have doubled over the last six months and growth is expected to continue into 2012.

Meanwhile this week, Labour mayor candidate Ken Livingstone warned landlords he will be taking action on the persistent problems faced by tenants, primarily London based should he get elected next May. The politician stated ‘I am determined to stand up for the hundreds of thousands of ordinary Londoners living in the private rented sector,’ he said. ‘Too many people are being hit by high and rapidly rising rents, unfair fees, or accommodation which simply isn’t up to scratch.” The speech at the London Young Labour conference will come as a warning to those landlords who are purchasing further property not to sacrifice quality.

Are you increasing your portfolio size? Who is your preferred buy-to-let mortgage supplier? Do you have a problematic landlord who charges high rents for substandard service? Tweet us your thoughts @iInsure365

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