Buy-to-lets set to double
The number of buy-to-let landlords could double by the end of the decade, despite clear signs of slowdown in the housing market, the expense of the new buyer packs and the near certainty of further interest rate rises.
Research from market analyst Mintel suggests there are now around two million people in the UK who own a second home.
Of these, half – or about three per cent of all homeowners – are buy-to-let landlords, with the rest owning a second property for their own use. Looking ahead, the survey found that a further three per cent of homeowners are looking to buy a second property to let it out by the end of the decade.
But Philippa Gee, investment director at Torquil Clark, the Wolverhampton-based firm of independent financial advisers, said these were worrying figures, highlighting the fact that more and more people were chasing the same market.
"Buy-to-let represents an interesting opportunity and many people who have been turned off pension and equity investments see this as the answer.
"But the situation is changing: Interest rates are increasing and the regulations are tightening up, particularly with the payment of deposits; the property market is also facing a cooldown.
"Anyone considering a buy-to-let should seriously rethink their approach and consider other investments.
"It is illogical to see how anyone can see this as a golden ticket to success."
But Paul Davies, senior financial analyst at Mintel, said: "Increasingly, property owners are seeing the benefits of investing in bricks and mortar and often regard the second homes market as a good alternative means of saving for retirement.
"As long as these trends continue, future growth in this market should be guaranteed."
Savings and loans specialist, Pendeford-based Birmingham Midshires, said the Mintel research confirmed its view that buy-to-let had matured from "a young upstart to a solid and established part of ther UK mortgage market".
