It is impossible to say with any great precision what will happen this year, but what I do think is that we should be approaching the New Year with an equal measure of optimism and caution.
This year is likely to be steady in a business-sense, and without wanting to state the obvious, hard work.
There has been some suggestion that 2012 will see a ‘boom’ in the buy-to-let market, but I think this is a little wide of the mark. Without going over old ground, there is still much uncertainty in the financial marketplace with the problems around the euro persisting, meaning that the money markets are still very nervous. So to say anything is going to boom this year seems unrealistic.
However, we do need the buy-to-let market to increase, especially given the Government cut backs in social housing and the potential impact that this is going to have on a large proportion of the UK population.
Never before has there been such demand for private rented property and this will only increase in the coming months. We will see steady growth this year in the buy-to-let market and ‘steady’ is the key word here. Paragon Mortgages’ latest survey of intermediaries (FACT) revealed that 53% expect to write more buy-to-let business in 2012 than they did in 2011. This is positive news, especially as 19% of those brokers also expect levels to rise by 10% or more.
Lenders are also working hard to make things easier for landlords to grow their portfolios, by launching flexible products with more accessible criteria. We launched 50 new products ourselves earlier this month to give landlords more choice. However, whilst there is more competition now in the market and more product choice, lenders are still competing in the same space. There are still not enough players in the market who cater for the more complex buy-to-let cases. In order to meet the different landlord requirements we still need the market to grow and innovate.
So looking ahead I believe we will see a year of opportunities for landlords and the buy-to-let sector, there is nothing wrong with being optimistic it is just important we keep our feet firmly on the ground.
Julian Rance is sales director at specialist buy to let lender Paragon
