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The past few years has seen a noticeable rise in the number of buy-to-let properties. So much so that many are describing this as a boom area for buy-to-let investors. The increase has gone hand in hand with elevations in property prices and the number of those renting in the UK.

There’s no doubt the area is popular. Since 2009 landlords have accumulated just short of £180 billion in profit, according to property firm Savills. Many landlords still believe the area will continue to bear fruition in the future with 89% expecting growing or stable demands from tenants in the next year in a survey conducted by lender Paragon Mortgages.

Rise in Mortgage Lending

Since the turn of the millennia buy-to-let has greatly increased its share when it comes to mortgage lending. In 2000, just 4% of mortgages were accounted for by buy-to-let, now it is around 16%. Landlords have benefitted from an increase in competitiveness in the mortgage market and the rising housing value.

Back in June, our ‘Buy to Let Expanding Market’ post discussed how this particular market was experiencing a strong upturn; since then it has gone from strength to strength. Between July and September the number of buy-to-let mortgages hit its highest level since the recession first started to make its impact on our shores. According to data from the Council of Mortgage Lenders (CML), 33,600 buy-to-let mortgages were taken out during this period; such numbers have not been seen since late 2007.

During the downturn of the recession the number of buy-to-let mortgages took a nosedive by around 70% as lenders tightened the reigns to protect their investments and profit margins. Now however, confidence is on the up for both investors and lenders.

Buy-to-Let Vs First Time Buyers

Although buy-to-let loans are on the increase, they are still some way behind first time buyer (FTB) loans. For the month of September, there were 11,300 buy-to-let loans compared to 28,600 FTB loans. Nevertheless, with both areas noticing an upward trend there is bound to be a degree of competitiveness between the two.

With a limited supply of houses currently available this is only going to continue. If this trend remains and house prices continue to rise we predict that the number of buy-to-let investors will increase which could have a negative effect on the FTB market. It’s also yet to be seen whether the government’s help to buy initiative will pay dividends for FTBs.

What does remain clear is that we are currently experiencing a housing boom: lenders are lending and potential buyers are buying. The market is a fascinating one and with all the changes occurring, it’s important to keep an eye on the developments.

What Gorvins can do for You

When purchasing any property it is essential to obtain legal advice. Gorvins Solicitors can provide you with expert advice and a first class service. We can help you with conveyancing, buy-to-let and re-mortgaging.

If you are considering buying or selling a property give us a ring on 0161 930 5151 or fill in our contact form and we will contact you.