Confidence in buy-to-let is 'dented'

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Confidence in the buy-to-let sector appears to be wavering as landlords look at remortgaging rather than boosting their portfolios further.

Figures from estate agent Hamptons International indicate that the credit crunch has played a part in dissuading many from taking out buy-to-let purchase mortgages. In fact, the proportion of this kind of mortgage declined by more than a quarter over the last four weeks.

Buy-to-let remortgages, on the other hand, increased by 6.2 per cent over the same period.

Jonathan Cornell, managing director of Hamptons Mortgages, said: "While buy-to-let remains a buoyant area to enter into, it appears that some buy-to-let landlords have had their confidence dented as a result of the recent credit crisis.

"Amateur landlords will have suffered the most and many may have held off from purchasing new properties - presumably in the hope that the marketwill begin to calm.

"Now that the Bank of England has cut the base rate by a quarter point, confidence will hopefully begin to be restored among landlords but it might take some time for this to take full effect. 2008 may not only signal the start of a New Year, but may also provide fresh hope for borrowers that interest rates will continue on their downward trend."

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