Buy To Let UK
Buy To Let UK | Market Report For Property Investors
In the ten years since the start of buy to let UK landlords have seen the prospects for BTL financing increase considerably. With buy to let UK property investors now have a range of BTL products to choose from with a variety of interest rate and repayment methods.
In introducing the concept of buy to let UK agency ARLA (the Association of Residential Letting Agents) tried to bring quality property back on to the market in the face of economic recession and a housing slump. ARLA made the point that with buy to let UK consumers could have access to property investment instead of this being the sole province of professional landlords. B2L, said ARLA, was for everyone, not just the specialists.
Ten years on, the buy to let outlook is rosy. People have come to see that investment in residential property offers opportunities for both short and medium term income supplements and long term capital appreciation. With buy to let UK property investors get the almost instant boost of receiving rental income, while the property itself continues to gain in value.
Buy to let demand has continued to increase, driven by several factors. These include migration into the UK from countries that have recently joined the EU. Migrants from these countries usually rent when they first arrive and may remain renters for longer than the national UK average.
Young professionals also bolster the buy to let UK market, especially as many first time buyers are delaying property purchases until they are well into their 30s. Rented accommodation no longer has a seedy image, with many properties having an upscale level of fitting and furnishing, especially in newer accommodation such as city centre flats.
BTL Financing
Given the increasing popularity of buy to let, mortgage lenders have reacted by increasing the range and flexibility of their B2L products. A recent survey by a financial comparison site found 1,500 different BTL deals. These include deals by sub-prime lenders, who lend to consumers who may have arrears on their credit records. In 1996, there were only a couple of dozen BTL deals, so this means that the buy to let mortgage market has experienced a 75-fold increase within a decade.
Buy to let mortgage lenders have also relaxed their lending criteria and buy to let rates as the sector has become more popular. Where once rental cover was in the 130 per cent to 150 per cent bracket, it is now more usually around 125 per cent, and may be lower. Loan to values have increased to around 80 per cent. Meanwhile BTL rates are more in line with those charged for residential mortgages.
The outlook for the buy to let market remains positive. In some areas, property prices are so high, that property can only be afforded if rented. There are also more parents purchasing property to provide student accommodation for their university age children or accommodation for graduate children who are unable to afford to purchase their own homes. All these factors contribute to a bright future for the buy to let UK sector.
