While in many cases, new equity mortgages appear to be on the decline, there does appear to be a trend where more people are getting into buy to let mortgages. This shift in the equity mortgage market may be caused by the upsurge in demand for rental properties. More people are interested in renting homes than ever before and investors are seeking opportunities. This appears to be working for well for equity mortgages, at least in this sector. However, the overall amount of new equity mortgages has declined and unless someone has excellent credit, their chances of getting one are diminished. Some banks are willing to go forward, but most are finding it nearly impossible to get an equity mortgage despite the increased interest in this market.
Nick Poyntz-Wright, CEO of Skandia UK, explained: “Private investors have accumulated significant amounts of equity in buy-to-let-properties after a long period of strong growth in home and flat values.
“Higher mortgage rates and falling property prices will cause investors to reconsider their exposure to residential property and many will choose a more diversified approach”, he added. “With inflation rising, investors realise the need for strategies that preserve their wealth.”
Related reading: Equity Mortgages
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