ROOF Blog

Buy-to-let investors are back in favour with mortgage lenders for the first time in two years, raising renewed concerns that first-time buyers could once more be squeezed out of the market for one and two-bedroom properties by landlords. Brokers said that a number of lenders have started to focus on attracting landlords with more favourable interest rates, after a long period of freezing them out. Despite the credit-fuelled boom and subsequent collapse of the buy-to-let market, which left many city centre flats empty and landlords unable to complete purchases, the lenders that are now re-entering the market perceive their customers as less risky than first-time buyers.

Bargain-hunters returned to the house building sector yesterday after a leading broker anticipated healthy gains for investors over the next year.

Citigroup laid the foundations for a recovery after turning buyer of Redrow, up 8½p to 131p, Barratt Developments, 6½p higher at 116p and Taylor Wimpey, 1¾p better at 35½p.

The sector has lost a fifth of its value over the past quarter over consumer spending fears for next year, but house prices, mortgage applications and housing transactions data indicate a more positive story, according to Citigroup, which reckoned shares could rebound at least 30 per cent.