The Independent is reporting that the buy to let market is still very attractive to landlords.
The buy-to-let sector is booming with landlords tempted by lower house prices, rising rents and improved mortgage deals. Homeowners can no longer rely on house prices rising steeply, but with rental yields on the up, taking advantage of high tenant demand and low supply is an increasingly popular option.
Media coverage of sky-high rents and cheap mortgages are an easy sell, but if you are considering developing a property portfolio, you need to be fully aware of the obligations which you will be taking on, as well as the opportunities.
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”.
With limited supply, landlords in many areas are driving up rents and lenders are showing their appetite. Mortgage lending to buy-to-let landlords reached £4.2bn across 33,500 loans in the first quarter of 2013, according to the Council of Mortgage Lenders (CML) and by the end of March it accounted for 13.4 per cent of total mortgage lending in the UK, up from 13 per cent in the previous quarter.
Interest rates are attractive too, with Leeds and Virgin the latest lenders to reduce rates on their buy-to-let ranges. The market is skewed towards landlords at the moment, but this doesn’t mean you’re in for an easy ride if you’re considering the role. Like a business, you need a careful plan and a dedicated budget for all the likely costs you will encounter.
It’s critical to do your research and find the right property in the right area. Decide who you want to rent to – students, families, young professionals – as this will affect the type of property you need and the areas you need to look. Students, for example, will want to be near university campuses, while property near good schools should suit families and homes near to decent commuting links will have high levels of demand from young professionals.
