Buy-To-Let Market Getting Stronger!

Buy-To-Let Market Getting Stronger!

The buy-to-let market remains a vibrant market as the figures show the growth in the sector from 2012 to 2013 increasing up to 30%.

With new regulations affecting residential mortgages coming in to place at the end of April, some lenders may put more importance on their buy-to-let offerings as they offer good margins, low delinquency and are exempt from the new Mortgage Market Review that will affect residential mortgages.

In regards to this we certainly expect to see growth in the sector in 2014 of 15% which would mean gross mortgage lending of around £24bn.

Also there is a lot of increase in lender appetite for risk, with loan-to-value starting to edge up with a number of lenders offering 80% LTV. Lenders are more demanding of their landlord borrowers than they were during the boom years.

However many do want to see evidence of income at minimum of £20,000 - £25,000, unrelated to the letting of the property, minimum age requirements apply with some lender and the credit profile of individuals is very important. 

An important thing for landlords or prospective first time landlords to remember is their local market.

Who is the landlords target market; families? Students? Or young professionals. They also need to have knowledge about the location such as how near the schools are and where the night life is etc.

The UK  has a home shortage and public opinion has changed in the last five or six years in that renting is no longer seen as a second rate tenure.For many people renting provides a more flexible lifestyle as not everyone should or want to become a homeowner.

Therefore demands for properties remain high and will continue to do so as our population increases due to net immigration, greater life expectancy and more people in single households.