Charles Haresnape is managing director of Aldermore Residential Mortgages
Data for the UK housing market confirms that, despite a few minor peaks and troughs, the market remains resolutely in the doldrums.
Although the latest HMRC figures show that property sales were slightly higher this January than they were last January (64,490 compared to 60,530), they were well down on December’s figures. And data from the CML shows that revival of the mortgage market stuttered in January, with new lending down by 9% on December and 3% compared to January 2012.
For those trying to sell properties anywhere other than London and some parts of the South East, this is a miserably difficult time to try and secure a sale. Good quality properties that should be flying off estate agents books are getting bogged down in sales chains and owners are becoming frustrated by their inability to find buyers.
One of the few practical solutions to this conundrum, other than cutting sales prices to the bone, is to rent rather than sell. For homeowners who have to move because of a job change or because they want to take advantage of low sales prices, then renting an existing property is a viable option.
Although the housing market isn’t showing much sign of life, the rental market is in good health. Currently, there are 8.5 million people renting in the UK and that number is set to increase in the future. Rents have held-up well and with an undersupply of new housing coming onto the market, there is no reason to believe that the rental market will stop its upward growth any time soon.
Let-to-buy is a very straightforward option. Aldermore’s recently launched let-to-buy option enables homeowners to remortgage an existing property using any of our standard buy-to-let mortgage deals. With a choice of fixed, discounted and variable rates starting from just 4.48% and loans available up to 80% LTV (75% for first-time landlords), let-to-buy is a financially attractive option.
The upside to a slow housing market is that buyers armed with finance are in a very strong position to negotiate competitive prices. This may be a difficult time to sell, but it’s a great time to buy.