The Buy to Let market in the UK is continuing to post improvements and provide investors with a viable opportunity to make a profit, it has been claimed.
According to Mortgages for Business, there are an increasing number of chances for individuals to gain access to finance and those with good credit and organisation can take advantage of the current market.
Buy to Let investments used to be a great way for individuals to earn additional income on real estate. And those who invested early are likely to be benefiting from lower costs, following the reduction in the Bank of England's base rate.
However, in recent years it has become more difficult to get a mortgage deal and increasing mortgage rates have left the market somewhat stagnated, with potential new investors struggling to gain a foothold in the sector.
But having been through the economic crisis and with property values at what can be considered 'affordable levels', the long-term investment potential of Buy to Let may be more appealing to a number of individuals.
Research that was conducted recently by LSL Property Services found that, while 28 per cent of landlords are looking to expand their property portfolio in the coming year, 48 per cent believe the current Buy to Let market is an attractive proposition for investment.
Benefits, risks and future
As with any property rental, the main benefit and aim of a Buy to Let landlord is to create a stable source of income through rent, alongside an increase in wealth through the rising value of assets. In the past, house price growth made Buy to Let
a popular method for investors to accumulate money.
In terms of risk, investors are most under threat from having to repay a loan to purchase a property. If the rental income does not cover the cost of the loan or the house falls in value, then individuals face the prospect of losing money.
At a time when the economic situation is fragile and house price recovery is uncertain, heading into the Buy to Let market
can be a difficult decision.
However, last month, a survey of landlords from Buy to Let lender Paragon Mortgages found that tenant demand for property is still strong, as 24 per cent of landlords reported that the demand grew in the first quarter of 2010, while 64 per cent said that demand was stable.
- Thursday 06 May 2010