Strong buy to let market predicted for 2012
In a recent survey mortgage brokers predicted that there will be plenty of growth in the buy to let market over 2012. Although the mortgage market seems to be faltering somewhat over the past few months, and does not look set to improve any time soon, the one area that is experiencing growth is buy to let, and this is sure to have a positive effect on the mortgage and property markets as a whole.
Buy to let has made up 21% of brokers’ total business since January which shows an increase from this time last year, and on an even more positive note, 23% were first time landlords, rather than just business people looking to expand their portfolio. This seems to show that although lending criteria has tightened, spelling trouble for first time buyers and mortgages for contractors, those looking to make an investment are still considered good options by lenders.
Buy to let can be a great investment for those who want to make some money in a relatively risk free environment, as the mortgage repayments which can trip people up at some point during their repayment term are paid for by the tenants living in the property. This means after the initial outlay for deposit and arrangement fees, the house pays for itself whilst the landlord is free to spend their money on other investment opportunities. By the end of the mortgage repayment term, the mortgage has been paid off in full by the tenants and is then free for the landlord to do what they wish with. Selling up will then give an opportunity to buy a much larger house and rent it out for more money, increasing the returns on the investment, or keeping the property and continuing to rent it out will bring in a monthly income which can be a great financial boost.
In the current climate, there is high tenant demand for rented properties, and rents are at the highest they have been for a number of years. This seems to indicate that this is a great time to become a landlord, as you are unlikely to find the property sitting on the market for too long, and will be able to start making money from your investment as soon as possible.
Article by: Steve Lambert, Senior Mortgage Consultant at Contractor Mortgages Made Easy
Media Contact: Raman Kaur, Public Relations Manager.
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