Increasing tenant demand and stable rental yields will contribute to making 2004 an even better year for buy to let than 2003, according to a forecast from Mortgage Trust. The buy-to-let specialist said buy-to-let lending was set to reach £16bn this year, in spite of gloomy predictions in 2002.
Austin Jelfs, sales and marketing manager at Mortgage Trust, said: “With numbers of first-time buyers at an all-time low, and an ever increasing number of single person households, tenant demand is likely to remain strong in 2004. With the additional Government initiatives to combat the shortage of affordable housing also expected to bolster the private rental sector, we predict new lending figures will marginally outperform those of 2003.”
Mortgage Trust expects house price inflation to stabilise at high single figures and rental yields to stay stable, especially in the South. The lender’s recent research indicates 68% of Mortgage Trust landlords are planning to hold onto some sort of property portfolio for over 15 years, indicating investors view property investment as part of long term financial planning.
Competition among lenders in the buy-to-let sector is expected to increase, with relationship driven service becoming a key requirement of both investors and introducers, predicts Jelfs.
He said: “Lenders will need to concentrate on their ability to process each case as quickly and efficiently as possible and flexible initiatives such as Mortgage Trust’s agreed reserve fund, are likely to be in increased demand.”