Far from being hit by the credit crunch, buy-to-let is booming according to the UK’s largest letting agent, Your Move. The number of leases commencing in January and February 2008 rose 21% compared to 12 months ago. Your Move says not only has the credit crunch led to a pronounced rise in tenant demand, but that the trend is set to continue.
Managing director of Your Move estate agents, David Newnes, said: “The start of 2008 has seen considerable growth in the buy-to-let sector. Squeezed credit and volatile mortgage rates have contributed to an increased demand for rental accommodation. First time buyers with little or no deposit are finding it virtually impossible to secure high LTV mortgages – the days of 125% mortgage are long gone. But frustrated wannabe first time buyers still need a roof over their heads - and buy-to-let is filling the gap. The strong fundamentals are impossible to argue with.”
Your Move has seen a notable increase in the number of people looking to rent in the short term leaving landlords in a strong position to expand their portfolios.
David Newnes, said: “The demand is definitely there. The private rented sector is the out-and-out beneficiary of the liquidity squeeze. Not only do buyers have less access to credit, but those that can get it have been spooked by the negative sentiment surrounding house prices. Landlords are cleaning up.”