Buy to let is back in business according to the CEO of lettings portal Upad.co.uk. But in the UK, where property is put on such a pedestal, the truth is it never really went out of business.
James Davis founder of Upad has said that now the UK housing market is showing clear signs of bottoming, buy-to-let investors should seize the opportunity to pick up property at heavily discounted prices.
Davis also pointed out that although prices have fallen, first time buyers are still finding it difficult to obtain a decent mortgage -- especially if they don't have a substantial deposit, which many don't. This is leaving many people forced to continue renting. Many more forced renters include those who sold property during the boom to rent for a few months, and have been unable to find a suitable property, or unwilling to buy in a down market.
However, buy-to-let investors face a lot of difficulties in the market that has been left standing after the crunch; perhaps the biggest being lenders' unwillingness to consider the rental income from previous investments as a person's income.
That said: this is likely just another way to restrict lending at a time when banks are trying to repair their balance sheets. So, investors with immaculate credit history and a chunk of equity in their properties should still be able to secure the finance they need.
In all honesty though, buy to let never really went out of business in Britain. We Brits have always put heavy value in property as an investment.
Though there hasn't been a lot of spare cash about, and lending has been restricted, there have still been literally thousands of people at auctions buying distressed and repossessed property to let -- and not all experienced investors. In fact the reports said that it was mainly new investors, having borrowed from the bank of mum and dad to launch their career as a buy to let landlord.
This article in the Guardian shows the level of investors at the first REDC auction in the UK in April, and this article on Write About Property shows that in January most properties being sold in the UK were being sold to new investors. In fact, the slowing pool of distressed and repossessed property for sale as the market recovers, coupled with continually restricted lending, may actually slow buy to let investment.
