The buy-to-let market is on the up and a study from the National Landlords Association has shown that one in ten landlords have added to their portfolio in the last three months. A further one in five intend to do so within the next year. These figures are quite high given the market, so why is there a sudden rush to buy?
The Bottom of the Cycle?
One reason might be to do with house prices. Although we’re still in a situation where long term house price growth is high, many landlords and property investors are starting to sense a recovery on the way which means that house prices are probably as low as they’re going to get for the considerable future. Buying at the bottom of the market is the best way of ensuring maximum capital growth on a property.
Lending Costs are Low
If you’re a landlord who does have access to credit then, with the Bank of England base rate stuck at its record 0.5% low, now is a great time to borrow. The interest rates can only go one way – that’s up – so borrowing is, theoretically, as cheap now as it ever will be. Fixed rate mortgages could be a good way forward as well, but beware that the rates will rise eventually.
A number of tenants are still feeling hesitant in the aftermath of the recession. As a result, many are choosing to stay in rented accommodation for a more prolonged spell.
As a result, now is a peak time for many landlords. More properties mean more risk and landlords need to use Rent Guarantee Insurance. Most policies will allow you to upgrade to cover more than one property with the same insurer, so check out the options.