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Will mortgage lenders continue to relax their borrowing conditions, as prices and interest rates rise?

We believe that lenders will continue to improve and innovate their lending criteria. Indeed, the biggest changes we have seen recently are the relaxation of the overall lending limits imposed by institutions. It seems the more successful a landlord becomes the more funding lenders are willing to provide. Recent examples of this trend are – The Mortgage Works announcement that they will lend an ‘unlimited amount’ on buy-to-let products (announced last Friday) as well as moves by Mortgage Express and Capital Home Loans to increase their portfolio lending limits to £ 5 million.

Will rent to interest calculations be lowered during the year?

Some lenders are already offering mortgage products, which only require 100% rental coverage so I believe that they can’t reduce these levels further. Indeed, if lenders do produce products that dip below this barrier, they will be setting a dangerous precedent that could have serious implications for the market.

Will the 90% LTV buy-to-let mortgage become more popular?

As the market continues to grow and develop over the next few years, 90% LTV products will become much more common place. However, in the short term, I don’t believe that these products will become hugely popular. Recent interest rate rises mean that rental yields will need to increase before borrowers can afford to pay the higher lending charges associated with only putting down a 10% deposit on a buy-to-let property.