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The Buy-to-Let Mortgage Arla Panel

May 19, 2008
Property investment first came into existence in the UK in the 1990s and has boomed considerably in recent years. Although there has been some recent turmoil in the financial markets experts still consider property to be a solid long-term investment. The downturn is also considered to be temporary and not severe meaning the property investment will be back on top of people's agendas in no time.

In the beginning buy-to-let mortgages were only available from several different lenders. Now that investing in property has become so popular there are now dozens of lenders offering hundreds of buy-to-let mortgages to property investors.

Several lenders who first brought buy-to-let mortgages to the public have combined with other established UK mortgage providers to comprise the Association of Rental Letting Agents, or the ARLA. In all, six of the biggest specialist lenders of buy-to-let mortgages make up the ARLA panel and between them they approve more than half of all investment property loans in the UK. The lenders are - Mortgage Express, Paragon Mortgages, The Mortgage Business (TMB), Birmingham Midshires, GMAC RFC, Natwest.

Through their contribution to the ARLA the above lenders have displayed their commitment to the buy-to-let mortgages industry. The ARLA regularly collects and produces information about the private rental market and publishes it for the general public to consume. The institution also engages the Government regarding issues that are important to landlords and to the buy-to-let industry itself. Without the ARLA, the mortgage industry and private landlords would not be able to express their views to the government in one voice.

One of the ARLA's initiatives was the ARLA Buy-to-Let scheme which persuaded lenders to reduce interest rates for investors wishing to purchase and rent out properties. The scheme was also designed to encourage people to participate in property investment and benefit from its advantages, such as a high certainty of capital growth over the long term. The plan seems to have worked as hundreds of thousands Brits now invest in property both at home and abroad.

It is therefore easy to see how important this body is to the private rented market and for buy-to-let mortgages.

Buy-to-let investing has boomed over the past decade so it is important for the industry to offer some form of protection to participants. The Financial Services Authority does not currently regulate buy-to-let mortgages, which is another reason why the ARLA panel is so important. Mortgage products that are secured against residential properties which are let out to tenants are regarded as commercial mortgages by the FSA and are therefore not regulated.

If you are looking to invest in buy-to-let property it is a good idea to gather as much information as possible regarding buy-to-let mortgages before you purchase a property. The internet is a good place to start, and mortgage brokers who offer buy-to-let mortgages are also a good source of information. It is important to conduct thorough research and source the best mortgage products that are available to you as errors can be costly and have a lasting effect on your personal finances.
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