Assetz® News » HOME | RSS Feed FEED | LIST ALL ARTICLES | ASSETZ HOMEPAGE
Investment Property News from Assetz

Assetz® Property News Service

Buy-to-let investors benefit from confident market

5th June 2006 | back to article listings BACK    print this article PRINT

A stable market appears to be aiding the buy-to-let sector in the UK, with confidence high among both consumers and lenders.

Research from MoneyFacts has indicated that buy-to-let and residential mortgage providers are now beginning to revise their rental and income criteria and this is seemingly making the products much more accessible.

Lisa Taylor from MoneyFacts observed that buy-to-let providers are increasingly lowering the minimum interest cover that they require, with the industry average now approaching 125 per cent.

While market confidence is opening up the buy-to-let sector to more investors, there is also evidence that people are becoming increasingly confident to take on mortgage borrowing in general.

The new Borrowing Monitor from Alliance & Leicester shows that 15 per cent of households are now thinking of moving, buying a property for the first time or remortgaging by winter. This compares to only seven per cent who thought the same thing in January when asked to look six or seven months ahead.

There was also a 28.4 per cent increase in new mortgage lending during the first four months of the year, as well as a slightly less spectacular increase of three per cent in remortgaging.

Property investment is also being supported by a steady supply of first-time buyers, according to Alliance & Leicester.

While the CML recently noted that first-time buyers accounted for more than a third of new mortgages between January and March, it seems that there has also been a significant rise in the proportion of under 30s planning to get a foot on the property ladder, from 12 per cent to 16 per cent.

Activity in the property market is also set to remain fairly high, with affordability apparently less of a concern to most than is often supposed.

As evidence of this, interest payments took up just 14 per cent of household income in the first quarter of 2006, which is lower than it has been since the second quarter of 2004. A quick look back to 1990 reveals that mortgage interest accounted for a staggering 27 per cent of household income during Britain's debt crisis, making the current figure look extremely modest.

Chris Rhodes, managing director of Alliance & Leicester Retail Banking, said: "We are seeing greater confidence in the mortgage market from consumers. It's particularly pleasing to see the increased confidence amongst the under 30s. Increased first-time buyer activity enables others to move up the ladder."

In the buy-to-let sector, investor landlords are benefiting not only from improved products from mortgage providers but also strong tenant demand. While house price growth seemed to slow marginally in May, it would certainly seem that conditions for property investment in the UK remain favourable.

Assetz® is a UK and International Property Investment Specialist. Please visit our property sites shown below.

Assetz for Investors UK Assetz Hotels Assetz Homes Assetz International Assetz France Assetz Spain Assetz Cyprus Assetz Germany Assetz Portugal Assetz Ski Assetz Cape Verde Assetz USA Assetz Finance Assetz Fund Management

Accessing the news service

You can view all of the Assetz® UK, International and UK Property Investment Articles and News here.

We also provide an RSS Feed Feed of the news service, or you can view all articles. Click here to view more information on RSS readers and how they make reading online news more convenient.

eXTReMe Tracker