The constantly evolving buy to let mortgage market has been contributing to the increase in demand for investment properties ever since buy to let investing became a mainstream form of investing. Ever since buy to let mortgages were first introduced to the UK in the mid 1990s, demand for private rental properties has increased considerably.
Many people consider investing in property as a means of funding their retirement. By investing in property people may not have to rely on underperforming pensions and equity based investments to provide for their later years. There is substantial proof that investing in property is more than just a hobby, with more than half of all landlords owning more than one buy to let property.
The growth of the investment property market owes a lot to the evolution of the buy to let mortgage market. In 1996 there were only a few lenders offing buy to let mortgage products that would allow would be landlords to invest in the local property market. Since then dozens of specialist lenders have released buy to let mortgage products ensuring that modern day investors have plenty of choice. This has helped many investors to grow their portfolios from small scale operations to large, multi million pound empires.
Without the availability of accessible buy to let mortgage products it would be virtually impossible for many landlords to achieve such levels of success. The majority of all residential investment property in the UK is financed primarily with a mortgage and a cash deposit. The mortgage normally provides the majority of the total funds required to purchase the investment property. Without the availability of such finance, the buy to let industry would not have boomed.
In more recent years overseas finance companies have also entered the UK buy to let mortgage market which has lead to an unprecedented level of choice. This has helped to reduce costs such as application fees and interest rates ensuring that more people than ever can invest in property. Local lenders now have to compete with overseas lenders and the increased competition has resulted in more competitive products for consumers.
Buy to let mortgages are also available to UK residents for buying overseas property. Parts of Europe – such as Spain, Italy, and France – as well as Florida, Australia, and the Caribbean have become popular with UK based buy to let investors in recent years. This trend becomes stronger when the local UK market experiences a downturn. During such times avid property investors who are hungry for new properties to add to their portfolios simply look to foreign markets to satisfy their needs.
Buy to let mortgage products have also become more sophisticated with some products starting to offer equity release facilities. Investors can release equity to either fund their retirement or to buy more property. The growing sophistication and accessibility of buy to let mortgage products for both UK and overseas property has helped demand for property investment grow steadily over the years and should continue to do so in the future. Despite some periods of turmoil property is regarded as a secure and long term investment that should stand the test of time provided the right properties are purchased with the best buy to let mortgages that are available. |
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