With the price of renting rising for tenants and a lack of mortgage finance keeping many first-time buyers off the property ladder, the buy to let (BTL) market in the UK has been going from strength to strength. According to the BTL Index published by LSL Property Services this month, rents climbed by 0.2 per cent between September and October in 2011 - making this the ninth consecutive monthly increase. However, the rise was less substantial than in previous months, indicating that the market is stabilising.
Operations manager at the Association of Residential Lettings Agents Ian Potter explained that a lack of available social housing and low confidence in the UK's property market among consumers is helping boost the number of tenants, making now a good time to be a landlord. Although potential buyers may be struggling to raise the finance for a house purchase, BTL investors are seeing the mortgage market open up for them, according to one expert.
Speaking at the Landlord and Letting Show in Birmingham this month, relationship manager at Mortgages for Business Gavin Elley explained that financial institutions are beginning to realise that "BTL lending isn't actually such a bad thing". He noted that there is no greater risk by offering such products rather than loans to owner-occupiers and as a result, an increasing number of lenders will start offering BTL mortgages.
"First-time buyers who traditionally would have bought a property are now looking to rent. That has skewed lenders' thinking in terms of BTL. Going forward, we will see more lenders entering the market," Mr Elley predicted. Meanwhile, Iqbal Hussain, property consultant at Knight Knox International, stressed that now is "the best time to buy", particularly for investors that have cash to spend, rather than relying on finance. He stated: "Prices are down, people can't sell their houses or sell investments to investors, so for anyone who has got cash at the moment, it is a good time to purchase anything."
- Monday 28 November 2011