Return of buy-to-let investors 'is bad for FTBs'

19-Jan-2010

For the first time in two years mortgage lenders are approving deals for buy-to-let purchases, which is bad news for first-time buyers (FTBs), a newspaper suggests.

There are now fears that landlords will squeeze FTBs out of the market for one and two-bedroom properties altogether, the Times claims.

Despite the buy-to-let market collapsing at the start of the period of economic downturn in 2008, the return to the market of many major investors has led them to return.

And lenders, generally, see buy-to-let buyers as less of a risk than a FTB, the publication says.

David Cowie, chief executive of Manchester Building Society, tells the Times: "FTBs do not have a proven track record of meeting mortgage repayments. We think that grade A buy-to-let is a much lower lending risk."

The Council of Mortgage Lenders last week revealed another problem currently being experienced by FTBs is the high rate of deposit required by most lenders before they will free up cash for a home loan.

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