House Prices
House Prices are predicted to rise this year and into 2008. Landlords are partly attributing the house price rises to a reduction in the number of properties being bought and sold. 2007 is likely to be a low property transaction year with sellers being the dominant party of the two. Buy To Let landlords have been expressing these sentiments by making comments such as ‘I just can’t find anything to buy’.
With house prices expected to rise by at least 7% in 2007 buy to let landlords cannot afford to roll over and accept defeat, they must strive to find property to purchase. Our historic property statistics highlight that most landlords will invest in a close proximity of their own home but recently we established that landlords are now prepared to travel almost most twice the distance to find a suitable property. In real terms, taking into account the distance is calculated on a radius basis, the area that the landlord travels to find a suitable buy to let property is enormous, that is to say enormous compared to only a few years ago. If you then combine this fact with relatively lower rental returns you can see why buy to let mortgage providers have moved into what we term ‘bulk buy to let’.
House price growth drives buy-to-let
Positive growth in the housing market is driving many investors to expand their buy-to-let portfolios, according to new research.
Housebuilder Linden Homes said that despite recent interest rate rises,
landlords were not being put off and 46 per cent of the homes at its Verve development in Slough had been sold to investors in the past three months.
With the average home price now at £188,623 according to Halifax figures, the buy-to-let property market is being driven by a strong rental demand, sparked by increase immigration, growing
student numbers and increased household break-ups, said the firm.
Chief executive of Linden Homes Philip Davies said that rising prices were above all else continuing to attract investors, many of whom saw their properties as their pension pots.
He commented: "The buy-to-let market has continued to thrive over the first two months of the year, with the prospect of further rate rises appearing to have little effect on investor confidence.
"Professional investors are expecting much more from developers than they had done previously, such as good value furniture packages, exceptional quality of build and strong rental guarantees."
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