The property investment market has seen buy to lets fade from the market as lenders stepped away. However, hopes are now growing that lenders might soon be starting to offer more buy-to-let loans as house prices look to be nearing the bottom, and rental demand holds up.
Moneysupermarket.com reports that the amount of enquiries regarding buy-to-let mortgages has increased by almost 50% in the last year.
There are, however, now 70% less products available on the market. Both new and existing landlords are finding a difficult challenge in finding a suitable mortgage for them. With fewer products available the interest rates will increase on the few available mortgage products.
The result of this will be that first time buyers will also struggle to get into the mortgage market, so will have to rent, leading to an increase in rental demand and rents will then rise.
Also, the influx of overseas workers and students looking for single person homes means that rental demand will be even higher. The increase in rents would then appeal more to landlords as they would have more attractive returns.
People’s desire to own investment property and possibly to earn their retirement income, means that a recovery in buy-to-let soon is very likely.