Buying a property to rent out has become one of the most popular investment choices for the average person.
Buy to let started in 1996 and ten years on has now grown to a multi-billion pound industry. According to the Council of Mortgage Lenders, lending has soared from 3.9 billion in 2000 to 12 billion in 2002 and 24.5 billion in 2005. Mortgage lenders spotted the need to adapt their products and the first dedicated residential investment mortgage was launched by Mortgage Express in 1996. The first products typically were two to four percent above the Bank of England base rate with strict requirements. Today mortgage deals offer loans of up to 85 per cent loan to value with no proof of income.
Buy to let has replaced the traditional saving plans and many people have used buy to let as a vehicle for their retirement. The attraction is monthly income from rent and capital growth from price increases.
James Scollard, director at CLIFFTONS comments “The property market is still very active with buy to let investors, according to a recent report, 83 per cent of landlords plan to expand or maintain their portfolios in the next six months; 85 per cent of landlords say rent is the same or higher than a year ago and 19 per cent of landlords earn more than £50,000 per annum from their portfolios. We actively provide guidance for professional and novice landlords and our lettings department is still extremely busy coming into the winter months.”
One in ten households (approximately two million) is now in privately rented accommodation, according to the Department of Communities and Local Government and is expected to grow by 3 per cent over the next ten years.
Posted: 22nd November 2006