This summer marks the Tenth anniversary of the buy-to-let mortgage. In July 1996 Mortgage Express (part of the Bradford & Bingley group) were the first to trial a dedicated buy-to-let mortgage product, and currently has a market share of approximately 20 per cent.
Buy-to-let mortgages evolved after new legislation within The Housing Act gave landlords more power to evict tenants who were not keeping up with their rent. In September 1996, the Association of Residential Letting Agents (ARLA) launched these loans via a panel of lenders, and hence the buy-to-let mortgage arrived in the UK property marketplace.
Relaxation of criteria reflects the realisation that buy-to-let is not as risky as lenders first thought. There are now around 70 lenders offering the buy-to-let product however albeit that around 50 per cent of all buy to let loans are written by the 6 members of the ARLA panel:Paragon, GMAC, Mortgage Express, Birmingham Midshires, NatWest and The Mortgage Business.
A risk analysis of buy-to-let versus residential shows residential loans have a higher risk profile. Latest figures from the Council of Mortgage Lenders showed that 0.68 per cent of...
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