Let’s be honest there has not been a lot of good news for buy to let investors lately. The government has penalised the market with additional stamp duty and punitive tax reforms and there are stringent HMO rule changes coming into force.
Buy to let property investors have reported that obtaining a mortgage for a buy to let property has become a lot tougher. Getting an additional mortgage for a second buy to let property is extremely difficult. As a result of all of this some existing buy to let investors have a plan to sell up and some of those new to the market believe that the returns are too low.
Some Good News for the Buy To Let Market
If you are already involved in the buy to let market or thinking of getting involved we wanted to bring you some good news for a change. While there are certainly a number of obstacles in the way of today’s buy to let investor one thing that they could usually always count on is the demand.
House prices keep rising and there is still a chronic shortage of housing supply. The UK government has talked about fixing the supply problem for so long now but little has actually happened to fix the issue.
New Research shows that Renters want to stay in the market
Direct Line for Business recently carried out research in the United Kingdom that revealed the UK property market is moving towards a high percentage of properties being rented rather than purchased. They commented that the UK market is becoming more like the German property market in this respect.
There are approximately 17 million renters in the United Kingdom and around 70% of them are happy to continue renting rather than buy a property. A further 22% of these renters said that the main reason they did not want to purchase a property was because they did not want the burden of the heavy financial commitment.
Attitudes are Changing
The research also revealed that in 2017 first time buyers were paying an average of £207,693 for a property. This is more than 50% higher than in 2012 when first time buyers faced the prospect of an average purchase price of £138,663.
A few years ago most people were looking to get their foot on the property ladder. Now it seems that this has swung in the opposite direction because the financial burden is too heavy. Around 9% of the renters said that they wanted the flexibility that renting offered and 8% stated that they did not want to be tied down to one specific location.
Rental prices will always be a factor for renters but it seems that they are happier to shop around for a good rental deal rather than dive head first into owning their own home. Renters just want greater flexibility and they would sooner invest their money elsewhere.
So the demand for good quality private rented homes remains strong and looks like it will continue for years to come. As a buy to let investor you need to find the right property and do the right thing as a landlord. Buy to let investment is certainly not dead!
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