The Royal Institute of Chartered Surveyors (RICS) has announced that the UK property market has shown the largest national increase since before the recession. It appears that Government initiatives to give the housing market a boost have now taken effect, bringing great news to contractors who currently own property.
Peter Bolton King, Global Residential Director at RICS, announced a long awaited message for homeowners. "It looks like at long last a recovery could be around the corner. Growth in buyer numbers and prices have been happening in some parts of the country since the beginning of the year but this is the first time that everywhere has experienced some improvement."
The good news continued for those looking to buy outside of the ‘housing bubble’ of London and the surrounding areas, as the largest increases were seen in the West Midlands and the North-East.
"Since the start of the year, buyers have gradually been returning to test the market – thanks in no small part to government finance initiatives – yet the amount of would-be buyers seen in July saw a sizeable peak…Significantly, this growth was seen in each and every part of the UK as the recovery, initially focused in the south-east, spread to regions across the country." Commented Bolton King.
For those contractors looking to buy for residential or investment purposes outside of London, mortgage opportunities now exist that haven’t been available since 2007, particularly for those with lower end deposits.
The introduction of Government policies, such as the Funding for Lending and Help to Buy schemes, have prompted a revitalisation of the housing market, as lenders have been able to slash rates and increase the availability of mortgage lending.
The buy to let sector is a prime example of how the market has been affected by government efforts, as approximately 40,000 buy to let mortgage applications were approved in the second quarter of 2013, a substantial rise in comparison to 33,000 buy to let approvals in the previous quarter.
Mortgage availability for contractors looking to invest in the rental sector is currently at a five-year high, as lending for buy to let purchases has reached over £5billion in the second quarter of this year. With the level of mortgage lending now the strongest it has been since 2008.
Continuous strong demand for rental properties has encouraged potential landlords to consider the financial benefits of investing in the rental sector, particularly as rates are at a historically low and savings returns are currently poor.
Jackie Bennett, the Council of mortgage Lender’s Head of Policy, commented that strong demand for rental properties combined with improved market conditions and widespread mortgage availability has resulted in a significant expansion of the buy-to-let sector.
Whilst rates are low and higher levels of funding are becoming more and more available, demand for buy to let property could certainly rise. Now may be the ideal opportunity for contractors to invest in the rental sector in order to avoid future price increases and increased competition from other prospective landlords.
Article By: Taj Kang, Business Development Director at Contractor Mortgages Made Easy
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