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REPORT: Buy-to-let sector stronger than ever

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The UK buy-to-let market is performing very strongly at the moment, according to a report, Halls, hotels and care homes: the changing face of UK property investment, published by BuyAssociation.

It points out that Moody’s, the ratings agency, says that the market improved in the three months period leading to May 2012, and expects performance in this sector to remain steady, predicting that interest rates, unemployment and house prices will remain relatively flat during the rest of the year.

Ray Withers from Property Frontiers is quoted as saying that the squeeze on new home owners means that the rental market in the UK, especially in many major urban areas, remains very strong, and this makes the fundamentals for buy-to-let probably stronger than even back in the boom days.

“Due to the issue of affordability, many investors are focusing on lower value areas, mainly in the north of England and taking advantage of so called below market value ‘BMV’ deals,” he said.

This is something which investors should take advantage of, according to Jeremy Knight, Managing Director of Knight Knox International.

“If you exclude London, numerous major cities including Manchester, Liverpool and Newcastle have all had little to no residential building occur since the property crash in 2008,” he said.

“Increasingly, tenant demand over the years means that there is a huge shortage of city centre stock, something which any lettings agent will confirm in the majority of prime locations.

“Experienced investors are now capitalising on this, as they recognise that we’re at the bottom of a market cycle, and that there are good buy-to-let mortgage products available, which allow investors to get a decent amount of leverage. This has been demonstrated by the excellent city centre stock in Sheffield and Salford over the past six months.”

Click here for the full report.


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