While property prices show signs of remaining steady or even falling, and homeowners still to see any benefit from small improvements in the economy, the buy-to-let property market is thriving; 1 in 8 mortgages are now for buy-to-let properties. In fact it is doing so well that more and more people are considering a career change, launching themselves as buy-to-let landlords. It is no surprise, as figures released by Rightmove show that UK monthly rental charges have increased by 13.6% since 2009 and are set to rise by a further 2% in 2013.
Current Landlords Remain Positive
It isn’t just potential landlords who are positive about the buy-to-let market; the majority of those who are currently landlords predict that they have a good year ahead of them. A survey by CHL Mortgages showed that just over 70% of buy-to-let landlords foresee 2013 to be promising for them, with 33% intending to expand their portfolio over the next 12 months; this is a 2% increase from May 2012 in the number who were planning to invest in more properties , suggesting optimism is rising. Many see buy-to-let property as the safest investment choice, with 62% favouring this compared to 19% for stocks and shares and just 7% for cash.
Meeting Increased Demand for Properties
Difficulties in obtaining mortgage finance and the huge deposits required for properties, have forced more people to rent for longer than they would have previously. The difficulties experienced by first time buyers have contributed to the increase in the proportion of homes which are rented, which has risen from 31% to 36% in the last 10 years. This increase is placing significant pressure on rental properties, with demand outstripping the supply in parts of large cities such as London, Manchester and Bristol. These areas make the perfect spot in which to invest in buy-to-let properties and allow landlords to be more selective of who they let these to, seeking responsible tenants who will take care of their homes and pay the full rental payment at the agreed time. The predicted expansion in the number of properties available for rent in the coming months will provide welcome relief for prospective tenants struggling to find a new home. Those tenants with a proven track record of making prompt payments and receiving their deposits back at the end of their tenancy will be able to cherry pick properties from the increased choice available.
By Amy Millband