Landlord confidence grows in buy-to-let market

A majority (64%) of UK landlords feel more confident about the buy-to-let market as 2010 begins, according to the latest rental confidence index from Upad. The figure represents a 6% increase from the same survey in December. (Mortgage Solutions 13/1)

Landlords enjoy a much healthier 2009

Landlords enjoyed a 7.6% annual return on their investments by the end of December 2009, according to the latest index from LSL Property Services. The value of their properties rose 3% in the year while rental income added a further 4.6%. This means in 2009, a typical landlord made a return of £12,740. By contrast, in 2008, a typical landlord would have lost 8.8% or £15,100. Arrears performed very well in 2009. On average 11.7% of rent was unpaid by the date it was due, down from 14.5% in 2008.
(Mortgage Solutions 15/1)

http://www.mortgagebtl.com/

The latest Nationwide survey shows that house prices in the UK have risen for the seventh consecutive month.  The average value increased by 0.5% in November, surprising many observers as the pre-christmas period is usually sluggish for the property market. The latest figures reveal that the demand for housing is buoyant and considerably more resilient to macro-economic conditions than many experts intially thought.

Having been at forefront of the property industry, this reinforces Alpha Property Investment’s belief that movements in the housing market tend to be  the harbingers of the wider economic environment. Although the UK economy is still in a worrying state (notably in terms of unemployment , GDP growth, and a ballooning national debt),  the green shoots in the property market are indicative of a modest, yet sustained economic recovery.  Credit flows seem to be up-and-running again, thereby enabling mortgage lenders to ease their criteria and provide house-buyers with the financing facilities indispensable to maintain a healthy, wide-based demand in the property market. This could well be a self-reinforcing trend as lower interest loans helps consumers free up funds they can now spend on other goods and services, thereby spurring wider economic growth.

25th November 2009

According to Moneyfacts, the average interest on a 2 year fixed rate mortgage has fallen below 5%.  This is largely the result of the easing of inter-bank credit supply as well as revived competition between mortgage lenders as new (or returning) lenders come into the market. This is good news for borrowers as it is also leading to an easing of the general lending crieria attached to mortgages (e.g minimum income, arrangement fees, rental coverage…etc).