Buyers Market

The latest statistics prove how the buy to let market has grown over the past ten years. In 1997 there were 29,000 buy to let mortgages worth £2bn. Today there are 938,500 buy to let mortgages worth £107.8bn and account for 10% of outstanding mortgages.

In the first six months of 2007, 177,800 buy to let mortgages were taken out worth £21.2bn. This is an increase of 22% on the first six months of 2006.

It is an important sector of the market but it is often critised. The biggest problem has been that it is generally thought that buy to let investors are buying up property that first time buyers would normally be able to afford thereby keeping them off the property ladder. The argument against this is that many would-be first time buyers are choosing not to buy for several reasons. They prefer to have the flexibility of being able to move around jobs from city to city and renting enables them to live in the city centres. Some prefer to go travelling or even to remain in further education for longer.

The demand for rental properties is high and this has led to improvements within the private rental sector. Some years ago only 30% met government standards, in 2004 48% came within the standard and it is highly probable that this figure would be even higher today. Landlords now understand that those renting want well maintained property offering comfortable, modern accommodation with good facilities preferably in up and coming areas.

People believe that buy to let investors have more advantages than the average house owner, as they are able to claim tax relief for loan interest. It is of course for landlords, a business meaning all profits are taxed and Capital Gains Tax is payable when their properties are sold.

The buy to let market has provided business to many sectors of the community especially lenders and brokers because investors need professional help when taking out mortgages or when planning to remortgage property.

The general outlook for the buy to let market is good with rental property in demand, rents rising and arrears no higher than on normal mortgages.