With buy to let mortgages being pulled, interest rates increasing and loan to value of those existing products available decreasing it brings some cheer to landlords that average rents have hit the £1000 mark.
As the property market continues to falter demand for rental properties has increased to such an extent that the rental income from an average home has increased by 4 per cent since the start of the new financial year and have surged 12 per cent in the last 6 months.
It would appear everyone wants to cash in on the BTL market.
According to the Council of mortgage Lenders the value of outstanding buy to let mortgages has hit £122bn, a massive rise from £24bn and £2bn in 2003 and 2000 respectively.
The increase has been driven by first time landlords seeking quick capital gains not the more traditional view of long term investors based on rental income of the property.
However not all landlords are feeling the benefit of the rent rises.
Those buying into the market for a quick profit, especially buying into the congested new build flat sector, that had been advocated by the recently demised Inside Track, have seen rents falter and the value of their property begin to slide.
It is these investors, who have bought into the BTL dream in the last couple of years and haven’t taken the time or effort to fully research the market place in which they are buying, who will feel the worst of the housing market slowdown as they are hit with the double whammy of decreasing rental returns and a loss on their original investment.
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