Buy to let mortgage market bounces back

Buy to let mortgage market bounces back

20 May 2010 / by Rebecca Sargent

The buy to let mortgage market has begun to fight back after becoming one of the biggest casualties of the credit crisis.

Research from Moneyfacts.co.uk has revealed that the number of buy to let mortgages available has grown by 70 per cent since September 2009, from 179 to 304; many of which are at higher loan to value (LTV) levels.

Commenting, Darren Cook, spokesman for Moneyfacts.co.uk said: "This is encouraging news for investors, especially those who were locked out of the market as the maximum LTV's fell.

"Competition has returned to the market, as lenders make cuts to their new borrowing rates."

However, Mr Cook adds that Government proposals to increase Capital Gains Tax – currently at a flat rate of 18 per cent – to as high as 40 per cent, could damage the buy to let mortgage market further.

Mr Cook speculates that in a separate blow, the annual exemption limit for CGT, currently at £10,100, may come down to as low as £2,500: "This will bring hundreds of thousands more people into the tax net," he adds.

"One possible consequence could be an increase in the preferred investor properties on to the market as people scramble to take any current gains. The changes could spark a downward price spiral, but could create opportunities for both homebuyers and potential landlords."

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