THE BUY TO LET EXPLOSION

Why Buy to Let?

The buy-to-let investment market in the UK exploded in less than a decade.

Only eight years ago there were no buy-to-let mortgages. You had to be a very skilled yield manager with the letting laws and regulations putting off all but the bravest landlords.

Now thousands of ordinary people who are creating extraordinary wealth for themselves. According to the Halifax there are now over 400,000 buy-to-let mortgages with a staggering 48% increase in just the last 12 months (2004).

The Rental Boom

Unlike other European countries, our population is expanding significantly, predicted to reach 62.7 million by 2016 compared to 58.8 million in 1996.

Also the number of people living by themselves is increasing significantly due to the divorce rate and a general change in social trends as more people live by themselves.

The number of households in the UK is predicted to increase from 20 to 26 million by 2020 and rental demand is predicted to nearly double inside 10 years (Centre for Economc Business Research).

First Time Buyers Being Priced Out

The percentage of the UK housing stock owned by landlords has increased from 8% to 11% since 1996 and is predicted to peak at 15% by 2014.

With first time buyers being increasingly priced out of the market, this percentage could go even higher.

Private Sector Rental Property

In response, goverment policy appears to be moving towards the provision of social rented housing through the private sector.

» Part Two - Safe as Houses?
» UK Property Investment
» Property Investment Returns in Europe

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