by Mark Johnston
The Buy to let Market surges.
So far this year, the UK has seen a surge in house buying activity by landlords.
The strengthening of the buy to let market has come amidst a backdrop of the home buyers market hitting its lowest levels for 27 years.
Analysts suggest that many investors are being attracted by the strong tenant demand.
Professional investors and also first time landlords are it seems continuing to enter in to the buy to let market as rising rents and cheap mortgage finance boost the appeal of investment properties.
Recent research commissioned by specialist buy to let lender Paragon Mortgages has revealed that in the first quarter of this year, many landlords increased their portfolio size.
The Council of Mortgage Lenders(CML) recently reported that £4.2 billion worth of buy to let mortgages were advanced in the first three months of 2013, thus showing a 14 per cent year on year increase.
Figures reveal that buy to let lending stood at 13.4 per cent of all outstanding mortgages at the end of March, which is up from 12.9 per cent just a year earlier.
A current report by independent researchers BDRC Continental, also shows that 20 per cent of landlords expect to purchase more property over the next 12 months.
Strong rental incomes has meant that more and more novice have applied for their first buy to let mortgage as they look for better returns on their savings.
David Newnes of LSL property services, stated that “property investors are currently enjoying a happy marriage or rising rent with the prospect of even further rises and also cheap mortgage finance”.
Many estate agents have also reported an increase in the number of wealthy individuals looking to buy investment properties rather than upgrade their own home.
It also appears that many people have become accidental landlords as the tough economy has made it harder to sell their homes in recent years.
Nationwide Building Society, the second largest landlord lender after Lloyds Banking Group, offers the lowest ever landlord rate, which is a two year fixed deal of just 2.45 per cent.
The building society also added that their landlord lending is up 14 per cent over the past 12 months.
Many experts have therefore predicted that the number of buy to let remortgages will soon surpass home owner remortgages.
WhileLandlords, banks and mortgage brokers are capitalising on the phenomenal resurgence of buy to let it nowseems that the taxman is cashing in too, with related revenues exceeding £2billion a year.
John Heron, director of Paragon Mortgages, said: “It has been a steady and progressive start to 2013. While landlords are still benefiting from attractive market conditions, there is still a long way to go to meet the increasingly high level of tenant demand”.
In conclusion the rise in the buy to let market could mean that some potential new buyers could potentially find themselves competing for a home against property investors.
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