LANDLORDS TAKE ADVANTAGE OF LOW INTEREST RATES TO HELP RESURGENT HOUSING MARKET

With interest rates remaining low, and property prices remaining the same as a result, it is the buy to let market that has seen a surge in numbers over recent months.

When it comes to the housing market revival, it is Landlords who are leading the way. With interest rates remaining low, and property prices the same as a result, it is the buy to let market that has seen a surge in numbers over recent months. Banks and building societies signed off around £1.6bn in buy to let mortgages in July alone, a staggering 33% rise from the same time last year. The number of buy to let mortgages is also currently growing at four times the rate of first time buyer loans too, who have borrowed £4.6bn in the same time, only a 7% rise on 2014.

Even home owners are struggling to keep up with buy to let investment, with mortgages for new homes equating to £7.6bn, again only a 10% from 12 months ago. For those re-mortgaging their properties though, there has also been a huge increase, with existing home owners keen to take advantage of low interest rates and contributing to £5.1bn in loans, a 34% rise on last year.

What this means for the market is an inevitable rise in house prices. As supply decreases, the prices will rise, and buy to let investment will be the catalyst for this. Although just before the general election earlier this year the sector did take a hit from those fearing an additional tax or rental limit from a Labour Government, it has since seen a boom in investment. From 9,300 buy to let loans in July 2014, to 11,800 this year, it is obvious that the industry is benefiting from a healthier economy that is allowing more and more people to become prospective landlords.

The economic recovery is in full swing, and allowing more and more investors to enter the property market. This is turn is leading to an increase in purchases overall, and especially those able to take advantage of buy to let. It shows little sign of slowing down either. Lending levels are likely to continue to grow, if forecasts are to be believed, leading to the inevitable rise in house prices of 7% in 2015 and 6% in 2016.

This likely result of all of this is that interest rates will rise and more stringent checks of buy to let mortgage applicants will be put in place. With this anticipated over the coming months, now is the time to join the market as a buy to let investor and take advantage of the rates at their currently low level. If you are looking to join the buy to let boom then now is the time, so get in touch with Orchard & Shipman today to discuss your options and make sure that you get the best possible return from any investment you make.