Buy-to-let landlords jaded by mortgage market

Only 29% of respondents now evaluate their mortgages at least every six months, compared to 82% of investors who were actively tracking new deals in Q2 2008.

Worryingly, at the end of Q3 2009, 27% of investors admitted to evaluating their mortgages less frequently than once a year.

The Young Index data for Q3 2009 points to investors sitting tight; the average length of time that respondents expected to retain individual property assets stood at 12 years, up from an average of 10 years in Q3 2008.

Neil Young, CEO of Young Group, said: "Young Group’s research suggests that investors are fully aware of the constricted conditions in the mortgage market; 57% cited difficulties in obtaining mortgage funds as the principal barrier to investment property acquisitions. It seems they may be jaded by current lending conditions and have taken their eye off the ball when it comes to tracking the mortgage market."

There may also be a general assumption that with base rate currently at an all time low, dropping onto a lender’s Standard Variable Rate at the end of a deal is the best option, but this may not automatically be the case.

Young added: "Just because there are fewer mortgage products available, investors shouldn’t take their eye off the ball. 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."

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0 thoughts on “Buy-to-let landlords jaded by mortgage market

  1. Major Landlord

    I do love mortgage brokers. They will find any and every excuse to get punters to switch around for a 1/4 per cent here or there. Anyone who takes a moment to calculate the whole-life cost of the mortgage quickly figures that the short-term saving through a low initial 2 or 3 year fix is eaten up many times by a) the higher reversionary rate, b) the cost to get out and c) the broker’s and/or lenders charges. More often than not, you are better off staying put. But the broker’s answer is that you can switch again later. Of course he would say that: he doesn’t get any commission if he doesn’t sell you anything!!

    I doubt there are many – if any – borrowers today who can improve their deals in this much-more-controlled (sane?) market, unless they bought REALLY badly in the first place. I have progressively switched to base-rate trackers for all my loans, and now I am laughing. It was against the advice of several brokers who told me to go for the cheapest deal at the time, because I would always be able to switch again. If I had followed this advice, I could be paying £75,000 pa more interest now. That would bankrupt some people.

    I have a simple rule nowadays: if a lender or broker tries to persuade me to do something, I do the exact opposite. It seems to work every time!!