UCB Home Loans set to expand in buy-to-let

The lender has been taking an increasingly active role in the buy-to-let sector, with buy-to-let mortgages now accounting for around a quarter of all new loans.

UCB Home Loans managing director Charles Reed announced today that the company is planning to expand its role in buy-to-let in 2005 and will be launching a new product in this sector early in the new year.

"Buy-to-let lending forms an important part of our portfolio and we are planning to increase the amount of lending which we undertake on buy-to-let properties in 2005," said Charles Reed.

"We are also designing a number of initiatives to strengthen our range of buy-to-let mortgage products and will be announcing a new product launch in this sector some time in January which will bring even greater flexibility," he said.

Buy-to-let lending has grown rapidly in the UK since the turn of the millennium. "The total value of buy-to-let mortgages outstanding is now about ten times higher than it was five years ago," says Charles Reed. "The industry had about £5.4 billion outstanding on buy-to-let mortgages at the beginning of 2000 and we expect it to be in the region of £50 billion by the end of this year."

UCB Home Loans is due to publish the next in its series of biannual reports on the buy-to-let sector in February. Gradual changes have been taking place in this sector over the past few months, with rents becoming stronger in a number of areas of the country as would-be first time buyers compete for rental property prior to making a purchase.

"Two factors are governing the rise in rental incomes," says Charles Reed. "For some time now, increasing prices at the less expensive end of the market have made it harder for new purchasers to get on the housing ladder, with the result that they are staying in rental accommodation for longer periods whilst they save for a deposit. The winter also tends to be a period during which house purchases traditionally take a break from the more rapid activity that we have been experiencing during the spring and summer periods, and it seems that a number of first-rime buyers are now preferring to wait and see what happens to house prices in the new year before making a decision to purchase."

A series of tips for buy-to-let purchasers and the catalogue of reports on buy-to-let lending can be found on the UCB Home Loans website at www.ucbhomeloans.co.uk