Confidence in the buy to let market has mounted over the last few years. What with banks and building societies offering very little in the way of incentives for savers, many prospective landlords see buying property to let as a great source of income as well as a long term investment for a retirement fund.
Buy to let is recognised as one of the biggest mortgage markets in the UK, with investors looking for a quick and substantial gain from buying a property in a residential area to suit their target market. Be that on the outskirts of a city with impressive transportation links or in the heart of a zone that is overall popular with university students and home to bars, cafes and restaurants.
In response to the financial crisis that rocked the banking world to the core, banks and building societies are still enforcing tight lending criteria which is making it difficult for first time buyers to get onto the property ladder. In addition, lenders are also asking for larger deposits and this in itself is leaving many future home owners sitting on the side lines.
This shift in lending patterns that was implemented some time ago has seen an impact on the buy to let market and cautious lending has forced many more individuals and families into becoming tenants rather than home owners. This surge in people seeking for rental properties has prompted landlords to cash in on this demand by raising their monthly rental fees.
Despite recent reports publicising the fact that buying a home is still cheaper than renting a property, the difficulties people encounter while trying to secure a mortgage through the banks today is often impossibly disappointing.
There was a time when tenants were made up of students in university towns and individuals who had to regularly move from place to place frequently because of work commitments. However, those homes that were once considered as perfect opportunities for first time buyers to enter into the property market such as flats, apartments and smaller terraced properties have since been snatched up by investors ready to make a profit on those who simply cannot adhere to the demands of banks when it comes to securing a mortgage.
It could be considered that many of the properties which are specific to the typical first time buyer have now been made unattainable by investors. While these investors are looking at the potential of a property as another source of income, they have been inadvertently pushing the feasible first time buyer out of the market for a number of years.
The combined difficulties of securing a mortgage in today’s market and finding a property that is affordable has meant that the buy to let market is seeing a sustained growth and it set to continue in this pattern for the foreseeable future. With an ever expanding population and the demand for housing is at an all- time high, landlords are seeing a deluge of tenants renting on a long term basis and making a rented house more or a permanent home rather than a stop gap until something else comes along.
All in all the buy to let market is still one which is sustaining itself successfully with renting a home being the only practical way in which many individuals and families can find a property in their ideal location which they can call a home.