64% of respondents expect to write more business over the whole of 2006 than in 2005, and 29% expect to write ‘significantly’ more.
The outlook for 2006 is good, even in comparison with the increase in business volumes experienced in 2005. 43% of intermediaries surveyed felt that buy-to-let business volumes were at least 10% higher in 2005 than in 2004, and 7% said that they had experienced volume growth of above 50%.
Rising levels of confidence in the housing market, combined with increasing tenant demand, are expected to be the most significant influences on increases in business volumes in 2006. Growth in tenant demand is being driven by rising house prices, and 64% of intermediaries expect house prices to rise at a steady rate over the course of 2006. 71% of intermediaries expect rents charged to increase in the next year, which can be partially explained by the predicted rise in tenant demand.
Nicola Severn, Marketing Manager at Mortgage Trust comments, “This survey shows that the majority of intermediaries have high expectations for the buy-to-let market in 2006. They have highlighted a combination of long term influences, such as rising tenant demand and housing market confidence, which will contribute to the health of the sector in the coming year. Buy-to-let looks set to continue to grow, at a level at least equivalent to that experienced over the course of 2005.”
Glen Morris, Director at Berkley Consultants agrees that the outlook for the for the buy-to-let market is positive and adds, “In 2006 we expect our professional landlords to continue to refinance to take advantage of the best mortgage deals, and to gear up so that they are able to add to their portfolios. Throughout 2005 our investors maintained a business-like approach to their investments, taking a pragmatic view in relation to risk, diversifying portfolios to include a variety of geographic locations, and opting for flexible products that allow overpayments and payment holidays in case of void periods. We expect this approach to be maintained through 2006 and into the future.”
