If you are thinking of entering into the buy to let market for the first time we advise that you use extreme caution and do your research prior to taking the plunge. Check the area carefully, what rent can you realistically expect to get. How many properties are currently empty? How many new flats are being built in the area? How will you manage if the property remains empty for 3 or 4 months?
You will also need to get expert Mortgage Advise and this is one area where a good mortgage broker can be worth their weight in gold.
With a recent slowing of the property market some naive buy-to-let investors could get seriously burned.
Bradford & Bingley's preliminary 2004 results announcement said that there had been a doubling in the number of B&B buy-to-let mortgage holders falling behind with their loans.
Also the Council of Mortgage Lenders' full-year figures for 2004 back this up. The number of buy-to-let owners falling behind with their mortgage payments rose in the second half of 2004, for the second consecutive six-month period. In all, CML says around 3,300 such owners were in arrears for three or more months in 2004.
After five Bank of England base rate rises some landlords are clearly feeling the pinch. The National Association of Estate Agents (NAEA) backs this theory up. April 2005 showed a halving of buy-to-let transactions, year-on-year, for the month.
The NAEA said "Many people have gone into the market on the assumption they can have tenants 52 weeks a year and can get the highest rent."
But if people have been piling money into the buy-to-let sector in the hope that it will give them a pension, but they could be looking at problems long before retirement if they are not careful. With fewer prospective new buy-to-let owners around, those looking to get out of the market may struggle to sell their properties.
Mortgage Enquiry Form
Remortgage Enquiry Form
Mortgage Calculator
BUY TO LET ADVICE