Demand for Buy to Let mortgage products has decreased compared to before the credit crunch began say 73 percent of mortgage intermediaries.

These findings came from a survey conducted by Pink Home Loans which also revealed that only 11 percent of the mortgage intermediaries questioned have seen an increase in the demand for Buy to Let mortgage products compared to before the credit crunch and 16 percent have seen no changes at all.

Neil Hoare, sales and marketing director at Pink Home Loans said: “Figures suggest that the demand for rental properties have increased in recent months as people wait for house prices to hit their natural floor.

“So why have the majority of intermediaries not seen an increased demand for Buy to Let products?”

Dean Lawson from independent mortgage brokers Hannant Lawson, based in Milton Keynes, believes it is a direct result of falling property values and lack of liquidity in the market which has hit many investors and brokers hard.

He said: “12 months ago purchases and remortgages could be funded at up to 90 percent plus fees. Due to falling values any equity in these properties has now been eroded. Many investors are now looking at property values the same, or in some cases, below outstanding mortgage amounts.

“Who at the start of 2008 with an 85 percent mortgage could imagine being in negative equity by the end of the year? This equity issue is now preventing many from not only remortgaging, but also therefore for purchasing. A double whammy in terms of new business levels.

“Although recent rate reductions have helped the investor in terms of a reduction in expenditure, this will do little to kick start future investment. Before we start to see an increase in demand for Buy To Let products, I believe house prices need to stabilise and the lenders achieve the realistic levels in the pricing of their products.”