The Let To Buy Property Boom
The combined effects of mortgage rationing and stagnating property markets have given
rise to a rapidly growing trend commonly referred to as Let to Buy.While upwardly mobile homeowners seek to trade up the property ladder by taking advantage of low property prices, first-time buyers who do not have large cash deposits are being forced out of the property market and are having to rent homes instead.
As upwardly mobile homeowners find they cannot sell their current homes for anywhere near the asking price, they resort to letting instead to enable purchase of their new home.
The symptoms of this polarisation of the property market are twofold:
a)Unprecedented demand for rental properties and
b)An ever growing stock of properties to let.
Thus, the let to buy property boom is creating a new breed of Accidental Landlords who have very little experience in what is involved with letting property.
For many of these accidental landlords, letting their home is just a temporary measure until the property market picks up and they are able to sell, but for others this is a completely eye-opening experience. Either way, being a landlord for the first time involves a daunting learning curve with associated risks as well as rewards.
The risk averse will surely sell as soon as the market picks up, while the more adventurous will quickly discover the income earning potential of letting property and may well develop into the next generation of portfolio buy to let investors.
However, being a successful landlord or buy to let property investor is like any business, in that only the strongest survive the test of time.
Those of us with experience in buy to let know that in order to be successful, above all else you need the support of a good team around you. A good team of trustworthy service providers is the bedrock on which most buy to let investors build success, but a good team can take years of costly trial and error to bring together.
First and foremost, all successful landlords and buy to let investors need a highly dependable mortgage broker, conveyancer, insurance broker and letting agent. It is also important to have a good tax advisor with a sound knowledge of earning income from property.
As it is unlikely that anyone new to buy to let will have instant access to a team of trustworthy service providers, this could consequently expose them to financial risk.
It is critical for success therefore, that inexperienced landlords and buy to let investors tap into resources which can offer them the support they need in the very early stages of their learning curve.
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