There has been a rise in young first-time buyers interested in taking out buy-to-let mortgages as a way of investing their cash whilst living at home with their parents.
Data from Knowledge Bank, which reveals the types of products mortgage brokers are searching for on behalf of their clients, revealed a shift in focus within buy-to-let to new borrowers.
However, whilst brokers were searching in September for lenders who would accept first-time landlords, they were also looking for mortgages on behalf of first-time buyers keen to become landlords too.
Knowledge Bank said a rise in these searches came amid current uncertainty around future stock market movement and investment opportunities following Brexit. And it suggested bricks and mortar had, once again, become the popular choice for people’s long-term investments.
Feedback from mortgage brokers backed this up, revealing there had been a rise in interest from younger borrowers who were looking at buy-to-let as an investment while they remained living at home with their parents.
Self-employed mortgages
The most popular search, according to Knowledge Bank’s data, was for lenders who would accept self-employed applicants with just one year’s accounts.
This came as no surprise to Knowledge Bank, which pointed to recent data from the Office for National Statistics which revealed 4.8 million people were registered self-employed in 2017. This is equivalent to 15% of the UK workforce.
Buying overseas
This month saw the introduction of overseas mortgages to Knowledge Bank’s system – meaning brokers can now search for lenders on behalf of people who want to buy properties abroad.
Although Knowledge Bank’s data doesn’t provide information on ‘done deals’, its information indicates what sort of mortgages people are interested in taking out and therefore what brokers are trying to place for clients.
In the case of the overseas mortgages, the top searches were for buy-to-let properties. According to Simon Conn, an overseas property and finance expert, this is because buy-to-let products, as we know them, do not exist abroad.
He said: “Foreign lenders do not normally take rental income into account. The top country enquiries at the moment are for France and Spain. In France people are predominantly looking to buy for lifestyle reasons. In Spain people are typically looking to buy to rent a property out and generate a future income.”
