Buy to let loans jump to 9 year high
Mortgage approvals are at their highest level in almost a decade due to a recent boom in buy to let activity.
New research has uncovered a rise in the number of mortgage approvals - over 85,000 for the month of January 2016 - making it the highest number of approved mortgages since October 2007 where approvals hit a high of 87,594. The previous month of December 2015 saw 70,887 approvals, resulting in an impressive month-on-month increase of 20%.
When comparing January figures from the same month the previous year, the number of approved loans had increased by a huge 39.3%.
The recent surge in buy to let is believed to be as a result of the stamp duty changes which are due to be introduced in April 2016. Despite these changes, the buy to let market will still continue to flourish as landlords continue to obtain better returns from property than any other form of investment.
What does Sequre say?
Graham Davidson, managing director of Sequre Property Investment comments on the rise in buy to let activity:
“Following on from November’s Budget announcement, everyone is aware of the additional stamp duty charges due to be levied on second homes. While it’s understandable that some may be concerned over these slightly higher costs, investors need to consider the bigger picture. Those looking for a long-term investment will still see their returns increase over the next five years. As the economy strengthens, house prices will continue to increase and the private rental sector is predicted to soar by up to 29% in the run-up to 2020. The slight difference in tax looks nominal in comparison to what investors could earn from a buy to let investment.”
“Investors who may still want to avoid these extra charges can still invest now and beat the April deadline. With more and more investors using cash instead of finance for a property purchase, this allows for a quicker buying process and a quick completion. As always, investing wisely in strong locations that allow the best possible returns will be much more beneficial to landlords – and with the introduction of the Northern Powerhouse set to really give the northern property market a boost, buy to let doesn’t show any signs of slowing down.”
Sequre has access to ready-built, tenanted properties that are completely off-market. We offer genuine discounts of up to 20% on some deals due to our unique relationships with banks, housebuilders, developers and receivers.