Buy-to-let properties market set to boom but only if landlords can find the properties
The latest research by the Nottingham Building Society has found that 19 percent of UK landlords are planning to invest in more properties amid the bull market of recent months, Property Reporter wrote earlier this week. Furthermore, four percent of homeowners plan to become landlords for the first time over the next year.
Significantly, the study found that the buy-to-let properties market is likely to see exceptional growth in the coming year. According to Nottingham’s research, 70 percent of mortgage brokers believe the new pension freedoms enacted this April will fuel demand for buy-to-let mortgages. 26 percent of the brokers forecast that demand for mortgages will rise dramatically over the coming 12 months; 41 percent predicted a slight increase, while only two percent foresaw a decline.
“The nation’s love affair with property is as strong as ever and this is reflected in the growing demand for buy-to-let properties,” Ian Gibbons, Nottingham Mortgage Services Senior Mortgage Broking Manager, said. “Our research suggests that this is also being fuelled by the recent changes to how people can use their pension money. Clearly some want to use this money to buy property to rent out.”
Nottingham’s conclusions reinforce the findings of a report by insurance and pension services provider Prudential, issued earlier this month. The paper found that 37 percent of UK homeowners over the age of 55 are planning to purchase at least one more property. Significantly, 18 percent of would-be buyers said they will either purchase holiday homes, homes for relatives, buy-to-let properties or development properties, as opposed to seeking a new residence for themselves.
However, Prudential also cautioned that its research suggests “a rush of over-55s investing in buy-to-let property” has yet to materialise.
Meanwhile, the number of properties listed by UK real estate agents fell by 6.6 percent in the month of August, as demand continues to outstrip supply, new research by online estate agent House Simple recently found.
“Across the country there are thousands of frustrated buyers, with finance in place, ready to purchase, but the property supply reservoir has dried up,” said Alex Gosling, the House Simple’s chief executive officer, noting that the May general election was expected to buoy selling appetite.
“We would expect to see activity drop off over the summer holidays, so September will give us a better gauge as to how imbalanced supply and demand are right now. The hope is that after a summer when supply fell off a cliff, sellers will rediscover their appetite over the coming months.”