The Times - Fresh bank buy-to-let curbs hit first-time buyers
First-time buyers hoping to use buy-to-let loans to get a foot on the ladder by legitimately buying investment properties could be forced out of the market as more lenders withdraw these mortgages to prevent growing numbers of “backdoor” applications.
Aaron Strutt, of Trinity Financial, the broker, estimates that even with the tightened restrictions there is still a significant number of legitimate first-time buyer landlord applications, because rising house prices have forced some savers keen to put their money into property to think outside the box and consider buying farther afield.
“Trinity has several first-time buyer buy-to-let applications going through currently. They often buy in an area where they would struggle to afford the monthly mortgage repayments if they bought on a residential basis. Many people still see property as the best place to invest their savings and they are happy to carry on renting providing they have an investment property.”
He stresses that these deals prohibit borrowers from moving into the property at a later date under the same mortgage terms — to avoid making fraudulent purchases, applicants must genuinely intend to let the property out.
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