On the face of it, 2012 looks like it could be another bumper year for buy to let landlords, whether you have been in the property game for many years, or you are just about to buy your first investment property. But although the rental market is definitely increasing as more and more people decide to rent rather than buy, it is worth remembering that the current difficult economic conditions could have a number of knock-on effects as time goes on.
The credit crunch is affecting all of us. The cost of living is increasing almost daily, but even more significantly, the level of unemployment nationwide is also increasing. Jobs are no longer safe, and of course this will inevitably have a negative effect on the buy to let market.
Despite the general feeling that buy to let investment is a fantastic opportunity in the current market, there is also some suggestion amongst a few experts in the industry that the struggling UK economy will eventually lead to a rise in rent arrears caused by rising unemployment, evictions, and a fall in the average rent across the board, and since rental income services buy to let mortgages, landlords might end up in arrears themselves if they are unable to meet their monthly repayment on the loan.
Recent figures indicate that rent arrears were up by 20% at the end of 2011 and rental payments are becoming more expensive than mortgage payments, so keep a close eye on the fluctuating market conditions in the buy to let market as the outlook might not be so rosy in the long term.
