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General prospects for rental market are good

Posted by Richard in Property News, 19th May 2010, 2:04pm

Buy-to-let activity in the first three months of this year settled back to former levels, following a modest upturn in house purchase by investors at the end of last year triggered by the stamp duty holiday. Data published today by the CML shows as a result, the number of buy-to-let loans declined by 15% in the first three months of 2010. Over the same period, the value of lending also declined, by 12%
Buy-to-let lending has now remained broadly flat over each of the last five quarters. Compared to the first quarter of 2009, the value of buy-to-let lending in the first three months of this year is unchanged, while the number of loans declined by just 2%.
Commenting on the figures, the CML’s director general Michael Coogan said:
“Ignoring the effect of the stamp duty holiday, the lending figures show that the buy-to-let market has settled into a period of stable, low-volume activity. Generally, prospects for the rental market are good. But uncertainty over house prices, interest rates and the availability of mortgage funding is continuing to hold back the buy-to-let market at this stage.
“We also want to see how the new coalition government takes forward the Treasury’s initiative to encourage higher investment in the private rented sector, bearing in mind the scope for growth that exists to meet future demand from tenants. There is a case for targeted measures in the Budget, even though the primary focus will be the fiscal deficit.”
figures are the highest since the survey began.
Commenting on the figures, Kevin Wilkes, Managing Director of the Worldwide Property Group said: “The results of this survey are very encouraging as we can clearly see that confidence in the property market is continuing to increase. Despite a number of gloomy reports recently in addition to the general uncertainty that surrounded the potential result prior to the general election, people are showing great positivity and faith in the property market, and with very good reason.
History shows that the period immediately following a recession can be a great time to buy property. When combined with the continuing prospect of very low interest rates and an increase in overall market activity we are certainly seeing a rebound in the market that should continue throughout the year and beyond.”