Post Brexit lending restrictions will boost buy-to-let market

The fundamental factors of housing supply not meeting demand and the opportunity that buy-to-let presents in delivering regular rental income and long-term capital gains as not changed as a result of Brexit. If anything, there is a strong likelihood that even more people will be looking to rent, especially if the banks start imposing lending restrictions on the back of the EU Referendum result.

 

Since the recession, banks and other financial institutions have become more risk averse and the current uncertainty in the financial markets could lead to less mortgages being approved and a general slowdown in lending. This will inevitably mean that those people who can’t get a mortgage will turn to the rental market and this presents a good opportunity for buy-to-let investors.

 

Although buy-to-let investors will also face potential lending restrictions, the growth of the ‘ build-to-rent’ sector in the UK is tailor-made for today’s savvy investor and the direction the industry is heading.

 

Increasingly, people are looking for high quality living accommodation in the heart of the city and they are prepared to pay a rental premium for the right property.

 

By 2025 it is forecast that one in four households will be in the private rented sector and although cost of homeownership is clearly something that is driving this, there are also a number of people, especially young professionals, who prefer the flexibility that renting gives.

 

The weakness of the pound has created an opportunity for investors to acquire ‘build-to-rent’ properties at an all-time low price and as Brexit could potentially lead to more people wanting to rent, now is a great time to strike whilst the iron is hot.

 

To find out more about ‘build-to-rent’ developments and where the best opportunities currently are, contact us now on 0333 3001 888.

 

5 July 2016
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