Buy To Let Demand

Lately it has been said that buy to let investment is now only for the rich, but others are convinced that provided investors know what they are doing, there is still money to be made from the buy to let market.

Buy to let has a lower attraction now than a while ago with higher interest rates and less products to choose from.

The average deposit now needed is £65,000 an increase of 500% in five years. This has now become too high for many new buyers to afford and only a drop in interest rates will make buy to let become an attractive proposition once more.

The troubled market has not affected all buy to let investors with a recent survey showing over 50% of those surveyed were intending to expand their portfolios over the next year and 90% would not sell should house prices drop.

An Arla survey showed that if mortgage interest stopped buy to let investment being viable then around 25% would sell up. Arla also state that most landlords are in the buy to let business long term.

Those who are supposedly losing a great deal of money on new builds are considered to be investors only in the business short term with having intentions of selling as opposed to renting.

Softening house prices suggest many first time buyers are waiting before buying as they do not want to be caught in financial difficulties and therefore there is an even higher demand for rented property.

There are many other reasons for the heavy demand for rental accommodation including more single people wanted flats, many immigrants wishing to live in the UK and families on low salaries or on benefits. It is agreed that there will always be people who, for one reason or the other, want to rent property.

Although rents have dropped in the centre of London those just outside have risen buy up to 6% in the last year.

Croydon has become a sought after location because it is cheaper than London and only takes 18 minutes to get into the city by train. Aldershot is also popular because it is a cheaper area but borders both Surrey and Hampshire.

Many investors keep to one area for their properties as it is easier and cheaper to look after them and also their knowledge of the area is very useful.

Investors are now turning from HMO properties to family homes but are being warned about the possible saturation of new builds.