The buy to let sector is growing on both an annual and monthly basis while first time buyer activity is slowing, new research shows
According to Connells Survey and Valuation, buy to let valuations were up 33 per cent year on year to May 2015 and three per cent on a monthly basis.
That compares to first time buyer activity which fell 13 per cent year on year and three per cent between April and May this year.
“Britain’s buy to let market is booming right now as would-be landlords are eager to enter the sector and current landlords look to expand,” said John Bagshaw, corporate services director at Connells Survey and Valuation.
He explained that fewer people are looking to purchase property which is leaving more people in the rental sector. This represents an opportunity for landlords to “capitalise on the increased demand”, according to Mr Bagshaw who also warned that it is unclear how long the trend will continue.
Hive of activity
As a result, many buy to let investors and landlords and looking to complete deals to take advantage of rising house prices and larger potential returns.
Across the entire housing market, valuation activity was up by 13 per cent on a yearly basis while a three per cent rise was noted month on month.
Remortgaging activity was also strong, increasing by nine per cent between April and May and by 31 per cent on an annual basis.
Homemover activity remained steady by noting improvements of eight per cent on a yearly basis and four per cent month on month.
Mr Bagshaw suggested that record low mortgage rates are behind the increases in remortgaging activity and added that the Bank of England is “likely to play it safe and keep rates at bargain-basement levels” given that inflation is currently around the zero mark.
He went on to say that people are opting to improve their homes instead of moving and suggested that while a certain level of financial security now exists, it is not yet at a level where people are prepared to take risks.