In previous property downturns, journalists and indusrty pundits have focused on First Time Buyers as the necessary first step in stabilising the capital values of property. But this overlooks the role of landlords in the market which historically difficult to track but who in the last 15 years have increased their activity to some 12% of all housing stock.
Critically lenders used to treat residential invetsment and in previous recessions they would continue to advance funds to favoured clients as Business Loans but simply secured on residential property - extraordinary but in 1993 and subsequently we saw many such facilities as landlords sought to increase gearing. From these entrepreneurs from that period came the idea of branding Buy To Let for which Andrew Reeves of ARLA has never received the recognition that he desreves for the phenomenon that followed.
The idea that market recovery depends on First Time Buyers is fine if you are happy to wait for the trickle down effect into 2nd and 3rd time movers as pressure builds up - however Buy to Let landlords are active on the second and third rungs of the property ladder as they tend to seek 3 and 4 bedroom properties that have greater yields. Their issue is availability of funding and certainly in the short term lenders will focus their attention on First TIme Buyers but there are signs of lenders recognising that Buy to Let landlords are more part of the solution than part of the problem.
We are talking actively with existing lenders and potential new entrants to the market to redress the balance and for them to take on board the notion that support to Buy to Let Landlords may accelerate the rate of recovery of the housing market as a whole. If you are still experiencing funding frustrations give us a call - it might surprise you the level of support that might be available.
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