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The Future of Buy to Let in the UK

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By - Wednesday 12 May 2010

Recently, landlords have been faced with an uncertain market as pressures on the economy have led to falling property values and expensive mortgage repayments.

The pressure placed on the Buy to Let market was further compounded after the chancellor used the Budget to promise to make buying property easier for first-time buyers, which sparked fears that renting could be set to go out of fashion.

Added to this, the prospect of a coalition government is likely to do little to improve the current economic state and could leave property values hanging in the balance for the immediate future.

Julian Watson, of, explained the situation that many individuals have now found themselves in.

"With high prices and low interest rates, landlords tell us they are able to reap healthy margins at the moment," said Mr Watson. "However, in our study, many expressed grave concern for the longer-term prospects of the market.

"They are realistic that interest rates can't stay this low indefinitely and are nervous of initiatives the next government will introduce to assist first time buyers. Indeed, 86 per cent of respondents felt the announcements made in the recent Budget would not help landlords."

At present Buy to Let investors in the UK are unlikely to see a sudden market comeback and as such may wish to plan ahead to ensure that their investments remain secure.

Plan for the future

According to an article for, investors may wish to consider looking at their current mortgage arrangements and making changes where necessary.

Switching to a fixed-rate mortgage may be something that could result in a slight loss at the moment, although the prospect of rising interest rates could make it a viable long-term option. It will ensure that monthly repayments are kept to a single and set amount that is protected from rapid growth.

Furthermore, individuals with a number of properties may wish to consider adding them to the same mortgage, to take advantage of the equity, if the move is a better option than current individual mortgages.

Overall, this coming year is unlikely to be one in which landlords cash-in on government incentives and reap large returns on their properties, but at the same time a steady demand for tenants will ensure that 2010 will not be disastrous.ADNFCR-3415-ID-19770769-ADNFCR

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*This page is provided for information purposes only and should not be construed as offering advice. IPIN is not licensed to give financial advice and all information provided by IPIN regarding real estate should never be treated as specific advice or regulations. This is standard practice with property investment companies as the purchase of property as an investment is not regulated by the UK or other Financial Services Authorities.

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