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Thursday, December 23, 2010

Buy-to-let: 2010 to 2011

The past year has seen vast fluctuations in price and opinion with regard to the housing market, but one thing everyone in the industry seems to agree on is the boom in the rental market.

Throughout 2010 estate agents reported on unstable house prices, unemployment figures hit an all time high, lenders remained cautious, as a result the number of mortgage approvals remained low and demand for property to let increased two-fold.

The picture is expected to remain the same for the year to come, with a hike in interest rates on the cards, which could see many people forced out of their homes and into rental accommodation, whilst rents continue to climb – conversely there are some speculators on the rental market who are looking to a new approach to the industry, ‘build to let’. The idea being that if the property market remains fairly static the option of building for rental purposes can offer a highly cost effective and quantifiable approach compared to renovation or conversion.

Whilst the rest of the economy took a battering during 2010, the buy-to-let sector saw a few important concessions that allowed it to remain a highly viable option if you had the time and collateral to invest. The Budget and changes to capital gains didn’t hit landlords as hard as expected, whilst lenders who retracted lending agreements at the height of the recession have reintroduced buy-to-let products.

Many experts predict that 2011 will be a particularly fortuitous year to purchase property, with extra pressure on banks to lend, deflated prices and the huge rental potential – whilst in London the final preparations will be underway for the 2012 Olympics which will no doubt see the London lettings market boom, with the opportunity to maximise on rental potential ripe.

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