Anyone looking to make money in the current market must be looking at buy-to-let. The facts speak for themselves with research from Countrywide’s estate agency network suggesting that 18% of purchases are buy-to-let.
After suffering at the hands of house price increases between 2004 and 2007, rental yields are now riding high on the crest of a new wave of confidence.
So if around one in five house sales are buy-to-let, it worries me that I can count the number of lenders supporting this buoyant market on just one hand.
Sample research from our 200-strong lettings branch network has revealed that fresh enquiries for rental properties increased by 94% in January 2010 compared with December 2009 as demand continues to outstrip supply.
This doesn’t appear to be a temporary trend involving just professional investors. Small-scale landlords have recognised that the returns are improving and many are looking to grow their portfolio with a long-term outlook.
At a time when millions of people are suffering pension shortfalls and poor investment returns on savings, rental yields are going from strength to strength.
Part of this boom period for renting is due to the lack of available stock, which isn’t helped by the contraction of new-build and buy-to-let lending.
Our mortgage broker network has noted that there has been an 85% increase in the number of mortgage products available compared to January 2009. But while some lenders are showing an appetite for buy-to-let, we have yet to see any major uplift in available products for this market.
Some lenders have dipped their toes in the water but their lack of confidence is challenging for buy-to-let landlords looking to finance their next purchase.
Failing to support buy-to-let affects not just landlords but the thousands of tenants suffering through lack of supply, which will impact the next generation of would-be home owners and the value of bank portfolios.
GROUP CHIEF EXECUTIVE OFFICER