50 per cent of buy-to-let intermediaries cited the increased availability of more innovative and competitive mortgage products as a key factor in the generation of buy-to-let business volumes. This benefit was supported by the key fundamentals of strong rental demand and a positive outlook for the housing market in general.
These positive factors should result in more investment from existing landlords and may also encourage first time investors into to the sector. For the first time in seven months the percentage of business expected by intermediaries from first time landlords has risen (to 17%). This shows that intermediaries are confident about future property investment.
Furthermore the results also reveal that brokers think regulatory changes will pose little threat to the market. A mere 5% of respondents expect forthcoming legislation for Houses in Multiple Occupation to hinder the generation of buy-to-let business and only 10% believe that the introduction of Home Information Packs (HIPs) will adversely affect investor behaviour.
Intermediaries have on average seen a 6% increase in business volumes since the base rate change in August, and 47% state that they expect interest rates to fall over the next three months. Reductions in the base rate generally encourage borrower activity, and these upbeat predictions from buy-to-let intermediaries reveal a positive market outlook.
Nicola Severn, Marketing Manager at Mortgage Trust, comments: “Mortgage Trust’s October Buy-to-Let Intermediary Forecast shows that intermediaries welcome further product development and believe that healthy competition in the market serves to boost the sector. However, they are aware that the long-term future of the market is first and foremost dependent on factors such as steady rental demand and a healthy interest rate environment. Overall, brokers seem clear the market is working well and are confident for the future of the sector.”
