by Mark Johnston
The Buy To Let Market Goes From Strength to Strength!
It now appears that the private rented sector looks likely to be the longer term tenure in which more households may live in the future.
The rental market in the UK is going from strength to strength at the moment as more tenants continue to move towards the sector rather than buying their own homes.
Recent analysis of the rental market shows that overall buy to let activity was increased by 22 per cent in the year as more people opted out of buying because of the relative difficulties they have encountered with getting a mortgage in what is still a growing and expanding market.
Buy to let mortgage applications have skyrocketed by around 27 per cent on the year as more new and practiced landlords scramble to acquire new property for rental.
Industry experts believe that although “Our economy generally may be depressed the buy to let market is going great guns.”
George Spencer, chief executive officer of Rentify, the online lettings company, said: “It is not just the residential mortgage market which is picking up dramatically, the buy to let market is also seeing renewed confidence from landlords, with the number and value of loans at their highest level in five years.”
Industry figures have recently showed that lending on buy to let has raced ahead again, with the value of loans extended up 31 per cent on a year earlier.
The Council of Mortgage Lenders (CML) data has also 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.
Therefore it now means that buy to let loans now make up 13 per cent of gross lending.
It seems that this growth is fuelled by a renewed appetite from investors, both experienced and novice alike, along with better availability of buy to let mortgages at lower rates and with looser criteria than at any time in the past five years.
Current figures reveal that there are now around 1.46 million buy to let mortgages in the UK which accounts for around 13 per cent of the total estimated stock of 11.26 million mortgages.
The Council of Mortgage Lenders (CML) head of policy Jackie Bennett said: “Strong rental demand is 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. These conditions are creating more opportunities for landlords to remortgage.”
Stephen Nation, head of lettings at Sequence, added “levels of activity and growth across the rental market are unprecedented and showing no signs of slowing down.
So it seems then that residential rental activity in the UK is now at an 11 year high!
As the market improves, the attitude of landlords also has, with a greater number of practitioners now looking to secure longer term tenancies as opposed to the traditional six-month contracts, a notion that is now being approved by mortgage providers.
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