Buy to let investments on the rise again - Emerging Real Estate

Buy to let investments on the rise again

24/10/2010

 ‘Buy to let’ investments on the rise again

While the UK property market has had a difficult few years, it is now believed that the growing rental market is leading many investors to snap up buy to let properties while they still can. Despite the frequent speculations about new build properties lying empty around the country, it appears this picture is not very accurate and in fact new build bargains are in short supply (and expected to remain so for some time).

Recent reports have suggested that tenants registering for rental properties have increased by nearly 50% in the past three months, whilst available rental properties are down by the same amount from last year. Demand for rental properties could soon outstrip supply. Why is this situation now the case given how many buy to let properties have been untenanted over the past few years? It’s simple really – as we all know, first time buyers are for the most part pushed out of the market at the moment.  Mortgage lenders are now demanding very large deposits which most first time buyers simply cannot afford and these would be buyers are turning to the rental market instead. Not only that but the intention for many is to continue renting for the next few years – the extreme challenges facing first time buyers, lack of affordable mortgage options, and the risk of negative equity all contributing to this trend.

In addition, there is little new housing stock entering the market these days, a direct result of banks not lending money as before and often being unwilling to fund city developments. Until this situation changes the rental market will continue to rise. Investors are currently seeing yields of seven to eight per cent and we may well find that demand does outstrip the availability of rental properties, leading of course to increased rents as well. For example, a two bedroom property in Manchester rented at £750pm now could be up to £950mp in as little as three years.

To find the best bargains available, estate agents are not always the best call and off market opportunities with more boutique agencies are often a better bet. To talk to us about our buy to let investment opportunities, please contact us at http://www.emergingrealestate.com/