by Mark Johnston
The Buy to Let Market.
It seems that given the paltry levels of interest paid to savers in the current financial climate it is no wonder that buy to let has an irresistible financial logic for a growing number of people who have some money to invest.
Therefore rental property appears to remain an attractive source of income for many people.
According to the property search website, Rightmove, the proportion of ‘virgin landlords’ looking to invest for the first time is at its highest level for more than a year.
The number of buy to let mortgage loans has now reached its highest level for four years, latest figures have shown.
In total 136,900 new buy to let loans have been advanced during 2012, which is the highest number seen since 2008.
Nearly 1.5 million investors already hold buy to let mortgages in the UK, industry figures have shown and this also shows how demand for property investment has surged.
According to the Council of Mortgage Lenders (CML) buy to let accounted for 11.5 per cent of total gross mortgage lending in 2012, which was up 9.8 per cent on the year before.
Kristjan Byfield, director of sales and lettings agents Base Property Specialists, says “in much of country, buy to let has become the engine room of the property market as a whole”.
Recent research has also revealed that around 74 per cent of professional landlords are also intending to expand their portfolios in 2013.
Experts suggest that landlords who can demonstrate a strong track record are in a good position to expand their portfolios in the current climate.
Buy to let fixed mortgage rates have recently fallen to levels last seen in 2007. The average buy to let fixed mortgage rate currently stands at 4.69 per cent. Just one year ago it was 5.04 per cent and three years ago it was 5.77 per cent.
Increasing numbers of people are now renting property as they continue to struggle to raise a deposit and get on to the property ladder.
The Council of Mortgage Lenders has suggested that the buy to let market has benefitted from high tenant demand, which is likely to continue for the foreseeable future.
Rising rents in the past few years, which is partly as a result of more priced out first time buyers being forced to rent, have inflated the income landlords can earn.
The latest Census figures show that the proportion of British households renting has increased in the past decade from 31 per cent to 36 per cent.
Jonathan Harris, director of mortgage broker Anderson Harris, said “it is no surprise that the sector continues with its strong performance”.
Rents in Britain have risen dramatically in recent times and so buy to let appears to be a lucrative opportunity.
Paul Smee, director general of the Council of Mortgage Lenders, said “the overall look for the buy to let sector is positive”.
In conclusion it does seem that the UK property market could be on the way to a new buy to let boom.
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