Buy-to-let  

Barclays offers buy-to-let to first-time buyers

Barclays offers buy-to-let to first-time buyers

Barclays has extended its buy-to-let range to allow applications from first-time buyers and non-owner occupiers.

The move, which was announced in a note sent out to brokers, means borrowers will no longer need to own a residential property when looking to purchase or remortgage a buy-to-let property with the lender.

Barclays stated the change would provide first-time buyers with an alternative means of getting onto the property ladder.

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It stands to benefit young professionals in areas with high house prices, such as London, who are looking to purchase a property to rent out as an investment in a more affordable part of the UK.

Non-owner occupiers who may be looking to re-mortgage an existing investment property have also been given access to the lender’s buy-to-let range. 

A Barclays spokesperson said: “Barclays is a responsible lender and we’re always looking at ways to innovate and open up access to home buying.

“First-time buy-to-let will give someone who does not have a mortgage an opportunity to get onto the property ladder.”

The bank has not made any other changes to its existing buy-to-let mortgage application process, and all other existing criteria and affordability requirements will remain the same.

Ray Boulger, senior technical manager at London-based John Charcol, said: “It is certainly a helpful move, because it widens the opportunities for people who want to buy a property but either can’t afford to buy in the place where they want to live or perhaps don’t want to buy a place to live in because they anticipate not staying in one place long enough but want to have a stake in the property market.

“The fact that Barclays are joining the very few lenders that will lend to first-time buyers on buy-to-let, and because they are one of the bigger lenders on buy-to-let, it is certainly helpful because choices in that area are limited.”

But Mr Boulger urged caution when deciding whether to move into buy-to-let as a first-time buyer due to the 3 per cent stamp duty surcharge on additional property purchases, which was introduced by the government.

He said: “We used to find it was quite common for people who worked and lived in London and who wanted a property but could not afford to buy would purchase a property in the north or midlands, now they have to be cautious.

“If they buy a property like that, and then buy a main residence, they will get clobbered with the 3 per cent surcharge on their main residence.

“That takes away a big part of the attraction of being a landlord when you are a first-time buyer.”

simon.allin@ft.com