Buy to Let Demand Shows Signs of SlowingMake Text Bigger
Tenant demand for buy to let homes is showing some signs of peaking, according to the latest figures from one of the UK’s leading letting agents.
Although rental property viewings were up for four months in a row in July – by 6% – the year-on-year figure was 2.8% down on July 2010.
Tenants signing up to rent buy to let homes remained ‘high’ with four tenants competing on average for every property, said the letting agent Countrywide.
The number of buy to let properties coming to the market was marginally up – by 0.9% on June this year but a massive 16% on July 2010.
Overall, the buy to let market is healthy but the figures show a slowing down of prospective tenants looking for property and an increase in the number of properties available.
Countrywide chief executive Grenville Turner said: “The housing market continues to be robust with both transaction volumes and sale prices remaining broadly stable.
“As the UK economy continues to face considerable challenges, lending volumes are not likely to substantially improve until well into 2012.
“The size of the deposit remains the biggest issue facing consumers, not affordability of the loan itself. While lenders offer increasingly competitive rates to potential borrowers, more help with the size of their deposit would be more attractive right now.”
The findings of the Countrywide report also showed that in the wider mortgage market new buyer enquiries were down 8% on July 2010, viewings decreased 7%, new instructions to sell homes dropped by 20% and sales slipped by 1.8%.
In the second three months of this year, two-thirds of buy-to-let mortgage applications were for fixed rate loans.
Meanwhile, average mortgage arrangement fees increased by 17% in August compared with 12 months earlier, says independent finance group Moneyfacts.
In August 2010 the average fee was £879, which today stands at £1,030, an increase of £151 on last year and 3% on those charged in July 2011.
The most expensive fee is £3,800, charged by Accord Mortgages. Precise Mortgages charges the highest percentage fee at 2% of the amount borrowed. Around 350 mortgages – 12% of those available – have no arrangement fees.
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