With the Bank of England keeping the interest rates on 0.5% for the 14th consecutive month the status quo in the mortgage business seems set to continue.
So with the immediate future still promising to prove very difficult for the first time buyer to get onto the property ladder, without which property sales will stagnate, the opportunities in the letting sector of the housing market appear to be as attractive as ever.
The buy to let mortgage from its inception in the mid 1990’s has really opened up the rental business to a new type of Landlord, the sort of person who is looking for a single property or maybe a couple that can provide a very tangible means of providing a pension for later life. Buy to let mortgages are somewhat different to residential mortgages with the qualifying criteria usually being the amount of rental income the property can generate as opposed to the proof of salary required from a residential mortgage. It is not unusual for a lender to require up to 25% more than the rental income per month to cover periods when the property may lie vacant. There are however, plenty of choices of mortgages available, fixed rate, tracker, discounts and flexible rate are all now offered in the buy to let market just as they are in the residential sector. One difference being that the services of a mortgage broker will be usually required as the High Street Banks don’t always have the best choice.
The opportunities available in the rental business have also been widely advertised to the public at large by a large number of TV programmes such as Property Ladder, House Auction and Homes under the Hammer which give the would be landlord tips on how to buy property at an auction, how to cost a project, the savings to be made on DIY and the benefits of getting good, cheap landlord insurance. With the demand for accommodation in the private rental sector being fuelled by the dramatic increase in students particularly those attending universities and also the integration of East European countries into the EC creating a large increase in immigration the prospects for the buy to let landlord in the short term at least look good.