by Mark Johnston
Buy to Let Sector Still Booming!
First time buyers are still struggling to get on the property ladder and more people are being forced to continue as tenants dubbed by observers as “generation rent”.
Therefore, ‘Generation rent’ appears to be good news for landlords.
Strong rental demand has contributing to the continuing expansion of the buy to let sector, but growth is also being helped by improved conditions in funding markets and more widespread availability of mortgages.
Andy Young from Property Hawk Mortgages states that “During the first half of 2013 the buy to let mortgage market has continued to improve with more lenders and products for landlords to choose from.”
Previous data has showed that £5.1 billion was advanced to landlords in the three months to the end of June 2013, up 21 per cent on the first quarter.
According to new monthly buy to let data published by The Council of Mortgage Lenders (CML) lenders advanced £2 billion to landlords in July 2013, an 11 per cent increase on the £1.8 billion advanced in June.
The £2 billion advanced in July is made up of £900 million for house purchase, with the number of loans totalling 7,600 loans and £1.1 billion in remortgage lending, totalling 7,200 loans.
In regards to remortgage lending, Industry figures showed that the value of loans extended was up 31 per cent on a year earlier.
Research shows the biggest lenders to landlords continue to be Nationwide Building Society, Lloyds Banking Group (through its BM Solutions division) and a secondary tier of players including Coventry Building Society and Clydesdale Bank.
In relation to many of these figures it also appears that the Paragon Group, a mortgage and credit specialists, has seen a 164 per cent increase in buy to let lending in the nine months to June 2013.
The Paragon Group is one of the UK’s largest mortgage and personal loan providers and so trends in their profits are a good reflection of how the market is performing.
Recent data has also revealed that between June and July this year the number of new tenancies also increased by 6.6 per cent across England and Wales. On an annual basis, there were 12.3 per cent more new lettings in July than in July 2012.
Rentify, the online lettings company, have reported that they are adding rental properties to their website at the rate of 600 a week and now have 140,000 landlords and tenants registered with them.
Many industry experts have stated that they expect the market to continue to grow at an impressive rate in coming months.
All this said the fact is that investing in property is in some ways riskier than investing in shares because you can not simply sell up and walk away. Therefore anyone considering investing in property should understand that if prices fall and they can not find tenants, they could b ultimately ‘lumbered’ with an asset that they can not sell.
Story link - Buy to Let Sector Still Booming!
Related stories to : Buy to Let Sector Still Booming!