For a while now, the property market has experienced fluctuating fortunes.
After the boom in house prices ended around 2008, which was roughly the same time when the wheels started to come off the UK economy.
The average cost of properties has remained high; but as living standards have fallen in real terms, it’s not a buyer’s market at the moment.
People looking to invest in property for the first time may find that buying homes, offices and other commercial properties and selling them off for a profit might prove, at best, tricky. At the same time, many ordinary people on modest incomes may find that even saving for a deposit on a mortgage seems like an impossible task.
However, the demand for rental properties seems to be soaring.
Buy-to-let boom begins
Perhaps the major consequence of millions of business owners and house-hunters not being able to afford to buy an entire property courtesy of a mortgage are left with no choice but to rent. The demand for rental properties has gone up because of the current climate, which has served to make buy-to-let mortgages seem like an attractive proposition for aspiring landlords.
Recently, it was announced that demand for this type of mortgage had risen sharply. This is good news for lenders, while the low interest rates on offer and near-guaranteed income that could arise from rent every month make being a landlord a good idea for people with a bit of money to spare who have an interest in becoming business owners.
“It’s no surprise that buy-to-let is booming. Low interest rates are here to stay for at least a couple more years, meaning mortgage payments will stay low while savers suffer – the average savings yield is an abysmal 1.09%.”, said a spokesperson from Totally Money.
With rental yields soaring upwards of 6% in parts of the country, buy-to-let is starting to look like a smart investment. If you have the capital then the rewards are very attractive – there are few other investments that come with an expectation of inflation-busting income as well as capital appreciation”, they added.
Can the boom last?
Although the immediate future for buy-to-let mortgages seems bright, economic recovery could see it end. The reason for that may be that living standards rise, and that businesses and people looking to get onto the property ladder will feel more confident about getting a mortgage rather than lending. Also, perennially low interest rates could make mortgages appear more attractive.
