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It is a fact of life that the tough economic environment has forced more people to rent – which means those who have the means to invest in rental property have the chance to cash in on the recession.

Alan Ward, chairman of the Residential Landlords Association says: "It’s inevitable, in a recession, that more people turn to renting rather than buying. For one thing, fewer houses are being offered for sale and new-builds are also down dramatically with only 60,000 built last year – so people who have no need to move are renting instead."

On top of restrained housing supply, the availability of mortgages and the level of deposits required, which is usually around 20%, means first-time buyers are staying in rented property for longer.

Ward adds: "For some, it’s a lifestyle choice to rent rather than pay for a more expensive mortgage. Typically £650 would pay only the interest on a £160,000 mortgage rising to around £1,000 a month on a repayment. This equates to the rent on quite a large property outside London – and that would still only represent a house at £200,000 – so renting can make financial sense."

So there are more people looking to rent. This means if you can find a good property you can be sure of profits – if you get hold of the right buy-to-let finance. Having an expensive mortgage, or one with large fees, or even inflexible caveats might mean the difference between renting failure and success.

Talk to a buy-to-let mortgage expert about taking out the right mortgage to take advantage of a rising rental market. If you can find a loan that fits with your finances and fits with the rental income then you could do better than most during these tough economic times.

SOURCE: RLA, 02/03/10

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