A fifth of Platform’s recent buy-to-let business has come from accidental landlords where homeowners rent out their existing property instead of selling it when they are moving home.
The lender said that between early December and the end of January 2012, let-to-buy accounted for 20% of its overall Buy-to-letapplications.
Let-to-buy mortgages allow the borrower to retain ownership of their current property and let it out to tenants, then take out a new mortgage to buy the property they want to move to.
Recent figures by Rightmove show that properties are now on the market for an average of 105 days before they are sold.
In April 2011 the average time on the market was just under 80 days showing that sellers were increasingly having to wait to sell their homes and move elsewhere.
Lee Gladwell, business development director at Platform, said: “Uncertainty around the economy, employment and house prices is continuing to dampen demand for house purchases and this is driving demand from those choosing to rent rather than buy.
“Our experience shows that some of those that want to move and are unable to sell are choosing to become landlords and rent out their existing property, at least until the market improves.
“We launched our let-to-buy range following feedback from mortgage brokers who were telling us of demand from borrowers for these types of products.”
David Sansome, Managing Director at Sansome & George said: “I disagree that demand for house purchase in the South East is overly dampened down although transactional numbers remain well below the peak of 2006-2007.
It is however true to say that there has been growth in the rental market and that there has been an increase in “accidental landlords” requiring funding on the basis of letting out property.
Our mortgage advisers are helping both home buyers and landlords secure mortgages in the current market which, at the beginning of 2012, is much more lively than many predicted it was likely to be.”
