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Buy to let bounces back

23rd August 2005 | back to article listings BACK    print this article PRINT

The buy to let sector has bounced back with renewed vigour, says research conducted by the property investors show, with pent up demand set to boost the flat lining figures of recent months back into positive growth.

Almost 63 per cent of those surveyed said they still believed that the buy to let sector was still an odds on bet, and that its fundamentals remained stronger than the owner/occupier market.

An additional straw poll of industry experts confirmed the expectations, with a majority telling researchers that they were confident that the market would continue to show good returns on investment.

The survey showed that 62.7 per cent of respondents said they were planning on buying a buy to let property in the next year, with only 23.5 per cent saying that they were intending to sell a property. Despite the current stabilisation, 50 per cent said they expected the housing market to stay solid.

"An uncertain property market has provided landlords with a greater number of prospective tenants, as people choose to rent while they await a more stable period for the housing market," Nick Clark, managing director of Homebuyer events told In2perspective.

"In addition, developers who have been feeling the pinch have started to be realistic and offer good investor deals, with genuine drops in prices of as much as 20 per cent for landlords who are buying a number of properties at once. The combination of these factors signals that the market is on the crux of a turn, and buy to let is back in business," he added.

The sudden bounce back in optimism and expectations has a number of causes, say property experts. Mortgage lenders have contributed with a relaxation of some of their lending criteria and the recent base rate cut has fuelled market demand.

Both buyers and sellers had been holding off making any decisions in recent months to examine the markets direction and are now likely to move back into the market, further bolstering activity.

"Looking at financial markets as a whole, the property market should remain stable over the next three to five years, said Kamran Mahmood, Director of MiNC Property. Enterprises.

"However, anyone investing in property needs to realise that they may have to hold onto it for a number of years before they benefit fully from the growth. We are also experiencing an increase in rents and therefore our clients are seeing improved cash flow."

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