Despite, the housing market being in the doldrums, one sector that has continued to do well is the Buy To Let investment Sector. The Council of Mortgage Lenders recently announced that borrowing for buy to let increased from £20.8 billion in the second half of 2006 to £24.1 billion in 2007.
The buy to Let Market is offering good prospectives because of the difficulties of young people in buying a property. Therefore, there is strong demand for the renting sector. Whereas in the past young professionals would be able to buy, increasingly they have no alternative but to rent. Therefore, experienced property investors are seeking to buy up properties and gain income from rent.
Anecdotal evidence from estate agents suggests that many home sales involve people selling to property investors with a wide range of portfolios.
Home Ownership in the UK was encouraged in the 1980s. Mrs Thatcher enabled many to buy a council house, creating a ‘property owning democracy’ Home ownership has increased from around 50% after the war, to just under 80%. However, if long run house price forecasts are correct and prices continue to rise, this phenomenon of people having to rent may continue.
Although there is a strong desire amongst British people to buy a house, it may be that like the Continent, we increasingly become a nation of renters.
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2 comments ↓
The BTL market may be growing, but is still a hazardous market to be in.The credit crunch has made many forms of borrowing more difficult including BTL.
Completely agree Alan. Lenders are closing the options available to the BTL investor, despite interest rate cuts and a strong market.
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