Buy To Let Sales Increase
May 22nd, 2008 by 
Guy
A survey from the Royal Institution of Chartered Surveyors (Rics) suggests that a turn down in residential property sales is having a positive affect on the UK Buy to Let market.
The survey of residential BTL’s says that a number of surveyors are reporting a rise in instructions for BTL property valuations showing an increase of 29% in the quarter to April.
This is comparable with a survey for the 3 months before showing a fall of 2%.
A lack of demand to buy houses has forced sellers back into the rental market, where yields are rising, Rics says.
“The sales market’s loss is the lettings market’s gain,” said Rics spokesperson James Scott-Lee.
“Some would-be sellers are retreating from selling and letting or re-letting their properties as they wait for mortgage lenders to offer buyers more favourable lending criteria,” he added.
Rent Increases
Some people who are unable to get onto the property ladder or unwilling to buy while prices are falling are deciding to rent until the market improves, exacerbating yield rises.
Rics said 23% more UK surveyors reported a rise in gross yields, up from 5% in the previous quarter and gross yields are now increasing at their fastest pace since the survey began reporting them in April 1999.
This seems to be halting the recent retreat of landlords from the market.
Landlords who decided to sell their properties when tenant leases expires alaso fell from 4.6% in the previous quarter to 4.2%, the survey showed.
The problem in the UK residential housing market was primarily down to the credit crunch and the problems in the banking system, which have caused severe damage to the balance sheets of many of the UK’s lenders.
The banks have then been forced to increase credit repayments and pull many of their better mortgage deals, particularly for those without a reasonably large deposit.
This has caused concern for would-be house buyers who are unable to access a mortgage and a number of recent housing surveys have shown that lending is on a downward spiral, while house prices are also falling.
Earlier this week Rics predicted property sales could fall by 40% this year.
Posted in Mortgage news | 