Over the last few months, we've reported on a number of changes and trends in the UK's property market, from stamp duty to property asking prices. These trends and changes have naturally made many homeowners and potential buyers nervous about the future and sustainability of the housing market, but it would appear that any fears residential buyers or sellers have about a stagnating property market aren't being felt by current or potential landlords.
New figures from Equifax Touchstone show that buy-to-let lending in Q1 2015 rose by almost 20% year-on-year, significantly higher than residential lending which only saw a year-on-year rise of 1.6%.
If you were to combine buy-to-let and residential lending, overall spending for Q1 stood at £36.2 billion, 5.4% higher than in Q1 2014. The average cost of a buy-to-let mortgage was £151,033 (up from £145,017 in Q1 2014) and the average residential mortgage stood at £177,060 (up from £170,730 in Q1 2014). The figures also showed that March was the best sales month for mortgage brokers in going on 8 months, while all postcodes areas in the UK bar 2 (Perth and the Western Isles in Scotland) recorded positive growth in Q1 2015.
The figures also revealed that while lending levels have skyrocketed, the actual number of active brokers in the property market has fallen year-on-year, down from 8,288 in Q1 2014 to 8,028 in Q1 2015.
These buy-to-let lending figures are not surprising given that they build on figures posted in December 2014, where it was revealed that 54,000 buy-to-let loans were taken out in Q4 2014 at a total cost of £7.7 billion. Compared to Q4 2013, the volume of loans in Q4 2014 increased by 16% and the value of these loans rose by 26%. Of the total of buy-to-let loans in Q4 2014, 26,700 were for house purchases, while 26,900 were for re-mortgages.
Overall in 2014, there were 197,700 buy-to-let loans, totalling £27.4 billion. This represented a 23% increase in volume and 32% in value when compared to 2013.
Speaking about the successful results so far in 2015, Iain Hill, Relationship Manager at Equifax Touchstone said that lingering doubts over the market recovery have been eased and it's great to see positive growth in the buy-to-let sector. He also added that savers have become disillusioned with accounts that offer low returns and are looking for alternative ways to invest their money, such as buy-to-let property, hence the strong figures.
Buy-to-let properties can be an excellent investment and even a great substitute for a pension. However, it's important to remember that the overall return from your property will depend on a number of factors, including your input, changes in the property market and even major political events like this year's general election.
If you think buy-to-let is for you, here at CPS Homes we're experts in the buy-to-let field and can help you take your first step to becoming a landlord. Whether you're looking to purchase a property to let out or redevelop a property you currently own, we can help. We have hundred of suitable properties across Cardiff, from beautiful Cardiff Bay flats to detached 2 and 3 bedroom houses in Pontprennau! Contact our team today at one of our 3 Cardiff branches and please feel free to ask any and all questions you may have!