Is the buy to let market recovering?

A quick online search will tell you that experts everywhere are hailing 2010 as the year the mortgage and housing markets will see a sustained recovery. But what about the buy to let market? Is that growing too and is now a good time to buy a property to let?

Having hit rock bottom house prices are beginning to creep up again and it’s still a great time for would be landlords as well as experienced property investors to pick up a bargain. At the start of the year Reuters collated the opinions of 30 experienced market commentators to produce a forecast of 1.6 per cent average growth in house prices in 2010 and 2.5 per cent growth in 2011.

While house prices plummeted in 2008 and 2009, the rental market proved resilient as many potential buyers found themselves unable to secure mortgages while others were deterred by redundancy fears, possible interest rate changes and the looming threat of repossession. All of these factors have conspired to create an increased need for rental accommodation and unless more people enter the buy to let market there is a danger that there will be a shortage of flats and houses to rent.

Despite the fall in house prices many first time buyers are still unable to get on the property ladder and as demand continues to outstrip availability rents are likely to rise. Landlords offering good quality residential properties with reasonable rents are set to benefit from this surge in the number of people looking to rent a flat or house.

The recession has also meant many young professionals have seen their incomes stagnate so there is a growing demand for rooms to rent as part of houseshares and flatshares too.

In short, the downturn has made renting a much more appealing option for many, which should boost the buy-to-let market as new landlords step in to cater for this shift and existing landlords with access to funds expand their property portfolios.