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TODAY'S OTHER NEWS

Pension freedoms drive buy-to-let growth

The number of buy-to-let mortgages increased sharply in the first month following Chancellor George Osborne's pension freedom revolution.

The choice of deals has jumped 13% from 574 in April to 664 today, according to new research from Moneyfacts.co.uk.

That means the total number of buy-to-let mortgages has leapt 40% in the past two years.

Charlotte Nelson, finance expert at Moneyfacts.co.uk, said: “This represents a 40% increase on the 396 deals available two years ago, proving that the buy-to-let market is flourishing for new and old borrowers alike.”

Nelson said the sector was helped by the fact that it wasn't covered by the Mortgage Market Review (MMR), which has stifled growth elsewhere.

“With the sector lying outside of the MMR, it is unsurprising that the number of buy-to-let deals has risen to an all-time high," she said.

New figures show that 60,000 over-55s have already taken advantage of their new pension freedoms and Nelson said that some of this money has been accessed with buy-to-let in mind.

“Savings rates are currently so poor that many are looking elsewhere to fund their retirement.”

Buy-to-let providers are seeking to capitalise on this new pool of cash and are now offering more deals than ever to first-time landlords, she said.

“With high rents and mortgage rates at record lows, the potential for big returns is high; however, this may not be the case forever.

“With base rate likely to rise at some point in the future, it is essential for those thinking about a buy-to-let mortgage to secure one now while rates are low.

“Buy-to-let is not without its risks and anyone seeking to enter this sector would be wise to seek the advice of a financial adviser to see if this is the best route for them.”

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