Buy-To-Let Revival

Posted on February 11, 2011 by Steady Eddy There have been 0 comments

Modest Improvement

Houses for Rent

Buy-to-Let Market Improves

 

The CML reports that, during 2010 the market where people buy a property to let, possibly after carrying out some alterations or improvements, grew by 7%.

They also show that the number of mortgages for such investment properties rose by 0.5% to circa 1.3 million.  With total loans standing at £152 billion, that puts the average investment mortgage at just under £117,000.   

The last quarter of 2010 alone saw 28,600 new buy-to-let loans made for a total of around three billion pounds.

Good Time to Buy


Assuming that on average a mortgage loan is granted at around 60% of open market valuation, this suggests that the valuations on such buy-to-let properties is around £195,000 on average, rather above the average asking prices for houses for sale.

With both figures historically low, this may suggest three important things:-

a)     If you want to invest in homes to let, now could be a good time to ‘buy-in’ at the right price.

b)     Now could be a good time to obtain one or more mortgages for this type of property.

c)     If you can find properties that need some alteration or improvement to enhance their letting prospects, help from a mortgage lender may be available to finance these

Fewer Mortgage Arrears


With buy-to-let investors benefiting from low interest rates on ‘interest only mortgages, and with those who did get into trouble having  been able to benefit from the option to appoint a ‘receiver of rent’, such borrowers may be finding a return to favour  with mortgage lenders.

Forecast Buy-to-Let Growth


The Council of Mortgage Lenders is now forecasting strong demand from house renters during 2011, In part due to the continuing difficulties for prospective buyers to raise sufficient deposit money.  This will continue to drive this market.

Moral


Don’t put off buying your property to let, then extending and improving it to optimise your returns.

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