scene. Many of these landlords saw that buying a property to rent out was a way of getting an income and a possible capital gain. As the residential mortgage market slowed it did seem that brokers would have to wait for years for business to pick up. However because of the difficulties of obtaining a mortgage many people have now decided to rent and this has helped the market to rise. Landlords have seen their yield on rental income rise. The average rent in England and Wales is now £705 per month and this has encouraged landlords to increase their buy-to-let portfolios. It seems that we are now witnessing a fundamental change in the way that we choose to live and renting is now looking to be an attractive option. Several Local authorities are now operating Private Sector
Renting Schemes and this guarantees rent for five years even if the property is empty. If this scheme goes nationwide and lenders continue to improve their mortgage schemes we will have an increasingly more vibrant buy-to-let market and this can only be good news for brokers and clients alike.
Sally Laker, managing director at Mortgage Intelligence Group
The buy-to-let market is our great white hope for 2012 and
has shown small green shoots since the worst of the credit crunch. Rental yields are up, voids are down and tenant demand is on the increase. Another positive sign is the number of lenders now looking to enter the buy-to-let market such as Accord, and they will bring much wanted additional funding to this market. This will help not only intermediaries but lighten the load for the key buy-to-let lenders. Rates have become increasingly more attractive and we must remember that the average first-time buyer is aged somewhere between 29 to 35, needing a deposit of approximately £26,000. Renting really is the only alternative option, especially if there is no bank of mum and dad available. Experts predict that in 2015, 16% of all lending will be buy-to-let and possibly slightly more than that. There is a large percentage of buy-to-let business still with lenders that have exited that market i.e. Mortgage Express, Bradford & Bingley and Bristol & West and, at some point, those borrowers will want to remortgage. This is a great opportunity in the wings. Many brokers already focus on the buy-to-let market while others are putting plans in place to build this side of their business. I’m confident that there are significant deals to be done in this sector and that it is.
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