Buy to let demand beats out residential
Borrowers taking out buy to let mortgages have plugged the gap left by the decline in residential borrowers.
Mortgages being taken out for home purchases dropped by 23 per cent from December 2006 to December 2007, with buy-to-let firmly plugging this gap with an increase of 23 per cent over the same period to account for 39.53 per cent of loans.
Unsurprisingly, applications for residential mortgages saw the biggest slump between November and December 2007 - largely due to the instability within both the property market, and affordability constraints within the mortgage market. Remortgages held firm though, showing an increase of nearly 7 per cent.
The data also showed just how unpopular short-term fixed rates are becoming, with the proportion of borrowers opting for two-year fixes dropping by 30.61 per cent to just 16.19 per cent.
Attention is instead being turned towards short-term variables, with the popularity of two-year products increasing by 29.32 per cent year on year to account for over half of borrowing at 51.39 per cent.
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