The buy-to-let (BTL) market is thriving, and investors are in for the long run. A recent survey by West Bromwich Building Society showed that 92 per cent of brokers treat BTL in the same way as regulated contracts, and it makes up a sizeable chunk of their business levels.
Recent research from Bradford & Bingley also found that 34 per cent of women in property were under 30-years-old when they first moved into the investment sector, but added that 21 per cent were, by contrast, over 50-years-old when they did so. In total, 26 per cent of those surveyed were looking to make at least one more property investment over the course of the next 12 months. Buyers are becoming younger, and the market is diversifying
Ever changing
The market is forever changing – the BTL arena is seeing a surge of professional landlord entrepreneurs driving more portfolio business than ever before. We’re seeing a professionalisation of the industry, with fewer amateur investors entering the market, so remaining ahead of the game and getting the latest information available is crucial to getting the most of the market and higher rental yields. Treating the market as regulated and keeping abreast of the latest information is vital.
In just 10 years, BTL has become a national phenomenon. There are over one million households in BTL accommodation – more than 5 per cent of the UK total. The BTL property industry contributes over £30 billion to the economy every year, more than all the country’s pubs, hotels and restaurants put together, and more than four times the contribution of the British motor industry.
A gradual shift
The market has developed on the back of a gradual shift in housing demand. The changing lifestyles of younger people, a burgeoning student population, growth in separations and divorce and in one-person households, and the increase in inward migration have all boosted demand for flexible and affordable accommodation. BTL provides this, in a way that owner occupation cannot. The quality of BTL property has also come a long way in the past 10 years. Competition within the private rented sector has brought considerable benefits to people living in BTL accommodation, with the general improvement in standards across the board contributing to its increased popularity.
With the general improvement in standards of rented homes and changing lifestyles, many young people choose to rent rather than buy, because it is more flexible, more sociable and can be cheaper. Growing numbers of people will remain in private rented accommodation as they get older, leading to a phenomenon referred to as ‘permanent lifestyle renting’ – people who chose to rent over buying a home based on changing lifestyle and financial circumstances.
Success
The inaugural 2006 Mortgage Introducer Buy-to-let Forums, in association with the Mortgage Times Group, were a massive success for everyone involved. We were delighted at just how many high quality brokers were in attendance, and the event was extremely well organised, offering a wide scope of information about a thriving sector in the industry.
As a new venture in the mortgage event calendar, the Forum provided a great opportunity for visiting intermediaries to meet lenders on a first-hand basis and interact with a host of representatives from the BTL market.
I had many company representatives coming up to me during the day, telling me how useful the question and answer discussion forum was in gauging industry opinions about various BTL market issues. This provided a platform for many visiting intermediaries to use lender expertise and really make a difference to building and maintaining a BTL portfolio.
The Mortgage Introducer brand is one we are proud to be associated with, and highlighting the issues affecting the market such as product development and technological advancement in this sector is important. More Buy-to-let Forums are taking place this year, and we believe that the events will become a valuable part of our proposition and offer real value to hundreds of mortgage intermediaries for years to come.
BTL is set to remain inextricably linked to the future of the housing market and a vital element in providing homes for a significant portion of the UK population.
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