Research due out later this month from Hamptons International Mortgages will show the average time to exchange for a buy-to-let purchase has more than doubled over the last year from 42 to 85 days. The new research is the first of a quarterly index of market trends from the brokerage.
Jonathan Cornell, an associate at Hamptons, said: ‘The first-time buyer market is diminishing due to high prices. Landlords are stepping into the breach to buy up properties and they will not be pushed ‘ it is a lot harder to panic professional landlords into hurrying.’
John Heron, managing director of buy-to-let specialists Paragon Mortgages, disagreed: ‘I am familiar with our own buy-to-let figures and, since the acquisition, those from Britannic Money. What both lenders have seen is that in the early part of the year, while new applications remained high, the conversion rate slowed. I think this was due to the Iraq war, concerns over the housing market and the economy in general. However, since June transactions have speeded up and are going through noticeably faster than normal.’
Average buy-to-let loan to values (LTVs) dropped slightly over the year to 74% from 78%. Hamptons sees rental assessments as the brake on higher LTVs, and Cornell said: ‘The average buy-to-let client will borrow as much as they can for a purchase. What tends to cap this, apart from the 85% general LTV limit, is falling rental cover. However landlords seem happy to put in more of their own money at the moment.’
More positive news was that in the past year, the average time to completion for a residential remortgage has come down from 78 days to 39 days.
Cornell said: ‘This is down to lenders, such as the Halifax, now using specialised conveyance services which are accountable to the lenders, whereas solicitors are a law unto themselves. In another example, Northern Rock can now offer a 20-working-day remortgage, and meet that target by taking out title insurance to speed up the process.’
