Citywire, a well respected financial website, this week published an article outlining the difficulties faced by buy to let investors in the present climate.
They covered a lot of ground that we have discussed before but it is interesting to see the views of people who are not as close to the issue as some of us obviously are.
The report confirmed the fact that a lot of people had come into the landlord game very reluctantly when they were unable to sell their properties. It also looked at the fact that this quickly led to an oversupply of rental properties and increased void periods for a lot of landlords. It points out that the number of people attempting to get into the property business is falling for the first time in some years and puts that down to bad publicity about the state of the rental market at the moment, and also the fact that banks have become far more risk adverse.
The report suggests that banks were willing to turn a blind eye to over-hyped valuation in a less risk adverse recent past but now are increasingly pessimistic when evaluating a properties worth. This is driving a lot of new buyers away. Along with the fact that very few banks now accept less than a 15 percent deposit and some are asking as much as fifty percent on buy to let, the report concludes that the market should be a lot less crowded in the near future.
This probably sounds like a very good thing to a lot of established landlords.
