The second half of the year will be an ideal time for landlords to take advantage of a buyer’s market, Andrew Turner, chief executive of specialist buy-to-let broker Commercial Trust has argued.
Turner (pictured) said that this is with house prices having stalled in many areas, the plethora of competitive buy-to-let mortgage deals and the possibility of interest rates rising.
He said: “The effects of inflation and Brexit continue to keep prospective Bank of England base rate changes in check.
“At present, there is somewhat of a buy-to-let mortgage war, with the number of products the highest it has been for 12 years, according to Moneyfacts.
“Lenders continue to operate with squeezed margins as they offer lower rates and incentives like cashback and free valuations, to undercut rivals and entice buy to let borrowers.
“The question is of course, how sustainable is this trend and will we see rates rise before the end of 2019? This question could equally apply to the Bank of England base rate.
“Outgoing Governor Mark Carney, suggested in early May, that interest rate rises could be “more frequent” than expected, if Brexit is resolved and inflation and economic growth increase. Any increase in base rate is likely to have an effect on lender rates.”
Turner also pointed to expat buy-to-let as a growing market because of the impact of a weakening pound sterling.
He added: “A depreciating pound, as a consequence of Brexit, has perhaps played to the favour of expats, looking to invest in UK rental property.
“Whilst there is no guarantee of future currency fluctuations, we have seen the number of lenders in the buy-to-let expat market increase over the last year.
“Finally, we can expect a greater degree of professionalism and a larger proportion of experienced landlords with existing portfolios, to dominate the buy to let sector.
“The changes that have taken place over the past three years, have had more of an impact on landlords with smaller portfolios of one or two rental properties. Despite so much upheaval – and with more likely to come, there remains an upbeat note for landlords who retain their appetite for buy-to-let.
“However, with so much change within the industry it is imperative that landlords keep up to date with what is happening and how it impacts them. My weekly newsletter aims to do just that.”