In the boom times before 2008, the buy to let sector was filled with amateurs who were hoping to make a quick buck off what they assumed was a guaranteed increase in capital. Since this time however, the market has changed significantly and many of these amateurs have been pushed out.
Now, a market with a core group of professionals exists at the centre and in many ways it has been transformed into an entirely professional arena. In the last 10 years the number of homes being privately rented in the UK has increased significantly from 10 percent to nearly 18 percent.
There is little government money available for building social housing and so the demand for houses is currently outstripping supply. Furthermore, there are additional problems for potential homeowners as they are finding it difficult to get on the property market.
It seems that this situation is not going to relent by any significant degree in the near future and this is causing the buy to let market to recover at a far greater rate than any other market in the UK. The demand for mortgages in the buy to let sector is consistently increasing and mortgage lenders are recording more buy to let loans than in 2008.
In the third quarter of 2011, there were 40 percent more buy to let mortgages issued than there were two years previously. In contrast, the purchase of housing for private occupation decreased by three percent in the same period.
Moneyfacts.co.uk recorded an increase of 26 percent in the period between 2009 and 2011. Investors in the buy to let market are benefiting because the interest rates are very low, but the price they can charge for rent is always going up. The trend is something that looks set to continue and buy to let seems to have truly made a serious comeback.
A recent survey has shown that around 10 percent of all valuations that are being conducted are for buy to let properties. This is a significant increase on the same figures for 2009. It is also common for potential investors to have a survey done on a property to estimate its potential value once it has been repaired and is rentable. Money is borrowed to repair the property and it will later be purchased through mortgage after initial costs being covered by bridging finance.
The number of landlords who own more than one property is also increasing and brokers are benefiting from this. Brokers are competing for landlords and this means that their services are often very good. They are hoping that if they provide a good service to the landlord, then they are going to be recommended to other potential clients.
This allows them to expand their portfolio and is a strong motivating factor in them doing the best job possible. It seems that the buy to let market is one of the few housing markets that is enjoying some success in this otherwise gloomy time for the property industry.