http://www.telegraph.co.uk/finance/p...down-95pc.html
Buy-to-let mortgage schemes down 95pc
It is increasingly difficult for amateur landlords to remortgage as lenders refrain from offering loans.
The buy-to-let mortgage market has shrunk by 95pc in the past two years, making life increasingly difficult for amateur landlords.
The number of different mortgages available for rental properties has dived from 4,384 in April 2007 to just 213 now, according to financial website moneysupermarket.com.
At the same time, the rates charged on the loans have failed to fall in line with deals in the mainstream mortgage market.
The average interest rate charged on a buy-to-let mortgage has reduced by only 1.51pc since June last year, compared with a 2.6pc drop in average residential mortgage rates, while the Bank of England base rate has dived from 5pc to just 0.5pc.
Lenders are also demanding higher deposits from landlords, and there are now no deals left for people looking to borrow 85pc of their property's value, with investors instead needing to put down a deposit of at least 25pc.
The move by lenders to demand a higher deposit, at a time when house prices are falling, means increasing numbers of inexperienced landlords are likely to be unable to remortgage when their current deal comes to an end, leaving them with no choice but to stay on their lender's standard variable rate when their current deal ends.
Louise Cuming, head of mortgages at moneysupermarket.com, said: "The credit crunch has killed off the majority of buy-to-let deals.
"Because banks view buy-to-let borrowers as riskier than normal customers, the deals that are still available require an extra large deposit.
"Even if you are lucky enough to have a sufficient deposit and have found a suitable buy-to-let mortgage, you must watch out for the fees levied on arranging the deal, as these can be extortionate."
The problems faced by novice landlords have been made worse by a flood of rental properties coming on to the market, after people who were unable to sell their home decided to rent it out instead.
The big increase in supply has outstripped rises in demand, leading to average rents falling from £873 a year ago to £819 now, the group said.
But despite this, banks have increased the minimum level of rents they require landlords to charge from 112pc of their mortgage payment to 123pc of it.
The research came the day after the Association of Residential Letting Agents' (Arla) announced plans to make all of its members take part in a licensed scheme with a strict code of practice to protect consumers from cowboy operators.
