A recent survey conducted by mortgage organisation ‘Paragon Group’ reports an ongoing growth in demand for rental properties, with demand being at its highest for two years in the last quarter of 2010.
First time buyers have always struggled to get access to mortgage finance from lenders however it appears that now more than ever tenants are struggling to get onto the property ladder. This suggests a correlation between the increase in demand for rental properties and the decrease in the number of mortgages being accepted.
With the increase in demand for landlords, confidence should be booming yet not all buy to let property owners have this attitude. The monthly Upad Landlord Confidence survey recently found that confidence in the buy to let property market fell from 63% in January to 61% in February.
It appears to be the rising rent rates that are giving the 61% of landlord’s confidence in the market, and these rates won’t begin to fall until the banks relax their mortgage lending criteria. For the remaining landlords, it’s the worry of insufficient funds from the tenants and their reluctance to commit that is causing their lack in confidence.
Whatever landlords are feeling over the current buy to let market, according to Upad’s CEO James Davis, letting a property isn’t just about finding a tenant and raking in the rent; it’s about finding the right tenant and being as sure as you can be that they’ll look after both your property and your income.