Buy-to-let market continues to grow

Credit crunch leads to increased tenant demand

The buy-to-let sector of the UK property market has continued to grow despite widespread fears instilled by the credit crunch. This is according to research from the letting agent Your Move, reporting that there was a 21 per cent increase in the number of new lets that commenced during January and February this year, when compared to the same period a year earlier.

The organisation's research finds, not only has the credit crunch led to a pronounced increase in tenant demand, this trend is set to continue caused by volatile mortgage rates and squeezed credit contributing to an increased demand for rental accommodation.

The trend has been caused by buyers delaying purchases as they wait for market volatility to pass, and remaining in the rental sector, increasing demand.
Finance has also become harder to obtain as borrowers have tightened their lending criteria following the American sub-prime crisis unearthed last year.

Your Move has also registered a notable increase in the number of potential buyers looking to rent in the short term leaving landlords in a stronger position to expand their portfolios.

The research claims that with first-time buyers still needing a roof over their heads, buy-to-let is filling the gap. Not only do buyers have less access to credit, but those that can get it are being more cautious with the negative sentiment surrounding house prices.

The findings confirm those of the Council of Mortgage Lenders which finds buy-to-let lending totalled £24.1 billion in the second half of 2007, up from £21.2 billion in the first half of the year and £20.8 billion in the second half of 2006.