It estimated there are two million second homeowners currently in the UK, with half of these being buy-to-let landlords. This number of landlords is set to double in the next three years, with a further one million people buying a home to rent out.
Paul Davies, senior financial analyst at Mintel, commented: “It is clear that these days, buy-to-let is no longer the exclusive domain of professional portfolio landlords. Increasingly, property owners are seeing the benefits of investing in bricks and mortar and often regard the second homes market as a good alternative means of saving for retirement. As long as these trends continue, future growth in this market should be guaranteed.”
Many lenders have backed the report, saying the buy-to-let market is set to continue growing in the future.
Tim Hague, head of mortgages at Birmingham Midshires, commented: “The Mintel predictions suggest that the recent growth that we have witnessed in the buy-to-let industry is set to continue and also confirms that people are increasingly looking at property as part of a balanced investment portfolio.
“Birmingham Midshires has conducted its own research which has found that almost a third of property-buying singletons (32 per cent), divorcees (29 per cent) and single parents (30 per cent) are purchasing property as an investment, a sure sign that the buy-to-let market is built on very firm foundations.
“Given the financial commitment involved, we would urge anyone considering property investment to seek professional mortgage advice from a broker.”
Duncan Berry, mortgage sales director at GE Money Home Lending, added: “Mintel’s figures regarding the rise in second homes are good news for the market, and especially for non-conforming lenders who are likely to see a jump in the number of people opting for buy-to-let properties.
“Not only is buy-to-let continuing to outperform the market as a whole, but, with increasing demand, rising rents and a greater desire to invest in bricks and mortar, it looks set to remain a growing area in the future.
“Earlier this year, GE Money Home Lending surveyed UK brokers on their outlook for 2007, with three quarters claiming that buy-to-let will be the most important growth opportunity for them in 2007.
“Today’s figures from Mintel support this view, predicting a 10 per cent rise in the number of buy-to-let mortgages this year compared to 2006.”
However, Helen Adams, managing director of FirstRungNow.com, commented: "This is a real blow for first-time buyers wanting to take that first step onto the property ladder. Demand for one and two bedroom properties has been so high over the last few years - particularly from new landlords - that prices have risen to unattainable levels for many. This news means that the situation will get even worse for first timers. The government should take action to impede this trend which will lead to a divided nation - those from families with property and those without. Ease of availability of buy-to-let means that starter properties are too accessible to those who least need them."
