What is Happening in the Buy to Let Market?
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I find it difficult to fully understand the complexities of the buy to let market at the best of times, but now I find myself renting in a small desirable town that is short on housing and sees a bigger influx of renters (by way of students) year on year. So how is buy to let being affected at the moment and what does this mean for the area over the coming year? Is the market subject to media sensationalism or buckling under the strain of the credit crunch?
First off, it is important to note that buy to let mortgage products on the market have dropped by 25%, due to the nationalization of Bradford and Bingley. This simply suggests that currently, the only real viable deals to be made on the buy to let market can be reached by well-established landlords with sufficient money behind them and the fewer remaining lenders.
The next thing to be aware of is the Lehman Brothers fall a few months back due to the effects of the credit crunch. This means that those newcomers to the buy to let market who were expecting a steady increase in their investment properties (particularly relevant to a growing town like mine) now have to wait and hope that house prices begin to increase again, or alternatively sell before prices drop too low. Apparently, what happens next is anybody's guess.
So an increase in demand for rentals and a lack of accessibility for new landlords certainly makes it a mixed picture for the market and buy to let instructions have fallen as a consequence. But commentators such as buy to let commentators David Whittaker is confident that the media is sensationalising the current state of the market. He explains that although there are few products available compared to a year and a half ago, there are still c130 buy to let mortgage products available, and this is set to go up very soon.
However, for renters like myself, the effects will be most noticeable when it comes to landlords needing to re-mortgage again. Increased costs in this area, as well as a continuing demand for rental properties may well result in a rise in rental prices. And in a town like my own, where prices are already rising and certain areas vary widely in desirability generally (it's a coastal town), I can't help but suppose that sooner or later it may be more feasible to buy than to continue renting where I am.
Article Source: Articlelogy.com
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