You are here: Home - News -

Buy-to-let market looks set for a prosperous year

  • 29/01/2002
  • 0
The buy-to-let sector is expected to grow by 20% in 2002, says lender

Buy-to-let mortgage applications are set to increase by 20% in 2002 due to low interest rates and buoyant property values.

The prediction from Capital Home Loans also states that there will be a surge of new buy-to-let investors entering the market this year.

Trevor Child, marketing manager at Capital Home Loans, said: ‘We believe that the buy-to-let sector will prosper this year for a number of reasons. Interest rates should be steady and while the rental sector has historically been small it has the potential to increase to a size closer to the European average. Unemployment is also historically low.’

However, Roger Hillier, product development manager at Mortgage Express, does not foresee such a large increase. He said: ‘I am very bullish and optimistic for buy-to-let in the coming year. I think the market will increase by about 10%. What happens to property prices will affect the buy-to-let market. The possibility of an uncertain market has been included in many buy-to-let investors’ plans.’

But while optimism prevails among many buy-to-let providers, David Humphreys, director at Buy to Let Ltd, said there was a glitch in the market towards the end of last year. He said: ‘There has been talk of the market dropping rather than going up and at the end of last year some sectors had fallen in value. If you perceive the market as being in five levels, price wise, the top level has dropped back.’

Hillier agreed: ‘The market has tailed off compared with last year but not significantly. Interest rates remain competitive and will continue to be this year.’

Looking towards the future, Humphreys said lenders need to be aware of speculation. He said: ‘This year, lenders will look more carefully at buy-to-let investors. There is an element of a ‘get rich quick’ scheme in buy to let. Lenders never intend to lend to property speculators, the market shouldn’t be seen as speculative.’


There are 0 Comment(s)

You may also be interested in

Read previous post:
Treasury decision to expand FSA remit raises question over future of the GISC

The Treasury's decision to expand the Financial Services Authority's (FSA) remit to general insuranc...