A fifth of specialist lender Platform’s recent buy-to-let business has come from ‘accidental landlords’ – where home-owners choose to rent their existing property instead of selling it when they are looking to move to a new home.
The dedicated intermediary lender of the Co-operative Bank has seen significant demand for its let-to-buy range since they were launched last year. Between early December and the end of January 2012, let to buy accounted for 20 per cent of its overall buy to let applications.
Recent figures by Rightmove show that properties are now, on average, on the market for over 105 days before they are sold. In April 2011 the average time on the market was just under 80 days, showing that sellers are increasingly having to wait to sell their homes and move elsewhere.
Let to buy mortgages allow the borrower to retain ownership of their current property and let it out to tenants, then take out a new mortgage to buy the property they want to move to.
Lee Gladwell, business development director at Platform said: “Uncertainty around the economy, employment and house prices is continuing to dampen demand for house purchases and this is driving demand from those choosing to rent rather than buy.”
“Our experience shows that some of those that want to move and are unable to sell are choosing to become landlords and rent out their existing property, at least until the market improves.” ”We launched our let to buy range following feedback from mortgage brokers who were telling us of demand from borrowers for these types of products.”
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