Live or Let Buy... Could The 'Buy To Let' Market Work For You?

An Investment live or let buyWith Wings?

Last year saw another rise in the number of buy to let (BTL) mortgages being given and 2010 rebounded 10% higher than the total for 2009. The impact of the banking crisis shook up lenders to revise the promiscuous and financially licentious nature of their lending with its ‘let's cross that bridge later’ attitude to credit. The structural survey on the ground our heavily overpriced housing market was built on came back showing signs of heavy subsidence, the foundations required underpinning which has subsequently cost the UK billions. Unfortunately, to use a technical term, this was a ‘double whammy’ on the economy as a whole.


graph going thru floor The UK and world financial markets crashed

As banks amended their credit lending to become more rigorous and stringent in their evaluation of credit worthiness, everybody then realised that millions of people had used the inflated house prices of the previous decade’s property boom to borrow money against the value of their homes, the market for which had just crashed. The UK woke up after the biggest house party of the century with a very nasty hangover.

All this led to a stagnation in the purchase of new homes as even those that could get the funds to buy property were still unsure if prices would fall further after the purchase. However, a canny few dipped their toe in and realised the rental market had the potential to rise.  Apprehensive first time buyers were now being asked for higher deposits so were being forced to rent until they could get the funds together for credit approval. And so from a 60% fall in BTL mortgages in 2008 to a consistent annual rise since then there is now some confidence that BTL properties can be a wise investment again.

However, the new buyers of rental property realised that the three main rules of BTL redecorating had never been more true; i.e. 1. understand the rental target market, 2. decorate for a wide audience within that market, and 3. get it on the market ASAP. Tenants look at a property as a temporary solution. They want the security of having a trustworthy landlord but the freedom to move on when they need to.

So, even though a golden rule for BTL properties is to get them on the market as fast as possible this should still mean the quality of the finished property is high. For example, you may only spend £2500 on a simple kitchen but it should still be fitted to a high standard. Tenants are more likely to respect the property if the landlord has shown a high consideration for the people he or she wants to live there. Obviously it is key to look for bargains and kit out the property with hard wearing items that won’t need frequent replacing. Doors for example will take a battering and shouldn't be skimped on but finding a source of high quality oak doors of solid construction at a bargain price is not hard. Natural finish oak doors are a perfect example of the BTL holy grail. They don’t cost the earth from the right supplier, they’re appealing to a wide audience in any market sector and a supplier like UK Oak Doors will get them to the property within two weeks.

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