More mortgages for property buyers in UK but landlords could be hit by capital gains tax rises

Available mortgages for UK property buyers at their highest since 2008

The number of mortgages available to property buyers in the UK is at its highest level since 2008 particularly for those who do not have a large deposit such as first time buyers, research shows.

Analysis by comparison site,, shows the number of mortgages available at 85% LTV is at its highest since October 2008 and the number of mortgages available at 90% LTV is at its highest since December 2008.

‘These are positive signs for people who can only muster a small deposit, or have little equity built up in their home. For too long the supply of mortgages to this group of people has been too limited,’ said Hannah-Mercedes Skenfield, mortgages channel manager at

She welcomed the launch of a new range of 85% and 90% cent deals from the Post Office offering a two year fixed rate at 5.45% with a £999 fee. ‘This should really help stimulate competition and get this market moving again,’ she said.

‘One of the most telling trends of the last two years has been lenders’ near obsession with equity. The simple fact is that plenty of people can afford mortgage repayments but struggle to save the many thousands of pounds usually required for a 20 to 30% deposit. This means that many people have been needlessly locked out of the mortgage market, perhaps now this will begin to change,’ she added.

New buy to let mortgage products recently released onto the UK market indicate that lenders are easing up on landlords and that the lettings market could be on the up. While mortgages have mainly been available with a minimum 25% deposit over the last couple of years, the buy to let market has stalled. Many landlords have been riding out the low interest rates with a variable product, as re-mortgaging has not been a financially viable option.

It now looks as though things are beginning to change, however, as financial company The Mortgage Works has announced that it will be offering a small range of fixed rate and tracker buy to let mortgages for 80% loan to value.

But there is concern that the new government’s plans to increase Capital Gains Tax (CGT) could be a blow to landlords unless they are declared exempt. The new Government should be encouraging investment in residential property but the new CGT regime will act as a significant disincentive for landlords considering further investment, according to the National Landlords Association.

‘When landlords let property they are running a lettings business. Today, we are calling on the Government to ensure profits from this business activity are included as part of the exemptions. We are concerned that a tax increase of this nature will act as a barrier to further investment in residential property just at a time when there is an urgent need for more housing,’ said David Salusbury, Chairman, NLA.

‘The NLA will be doing everything we can to ensure that landlords’ activity is considered to be business activity for the purposes of CGT. There should be further consultation with the industry before drastic changes are mae. The law of unintended consequences should be considered here,’ he added.

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