Buy-to-letters make hay while sun shines …but clouds loom on horizon

Landlords are enjoying a period of relative prosperity, yet the mid-term prospects for the buy-to-let market are predicted to be very difficult, new research from landlords broker SimplyBusiness.co.uk reveals today.

Buoyed by low interest rates and the continued tough environment for first time buyers, buy-to-letters are enjoying strong yields on their properties, according to the study among 189 landlords.

Yet, with hikes in interest rates anticipated, and political parties pledging to assist first-time-buyers to get on the property ladder post-election, the longer term prospects for the industry are far less certain.

Julian Watson, Landlord Product Manager at SimplyBusiness.co.uk comments:

• "With high prices and low interest rates, landlords tell us they are able to reap healthy margins at the moment. However, in our study, many expressed grave concern for the longer-term prospects of the market."
• "They are realistic that interest rates can’t stay this low indefinitely, and are nervous of initiatives the next Government will introduce to assist first-time-buyers."
• "The recession appears to have dissuaded casual buy-to-letters from reinvesting, whilst the more professional investors continue to speculate.”

Chantelle Bleasdale, Managing Director of mortgage advisors ClickCover explains:

• "We have seen a rise in the number of buy-to-let investors re-mortgaging their existing residential property to access cheaper finance than is currently available through straight buy-to-let mortgages.”

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