Boom Times Ahead For Buy-to-let, Says Rics

Recent reports on the UK property market indicate that house price rises are slowing down and in some areas, they are even beginning to fall. Nationwide and Hometrack have both released data showing that this is true of vast swathes of the UK. Yesterday, a Halifax report concluded that prices in the north - including Yorkshire - and in the midlands are on the cusp of beginning a downward trend. Prices in the south-east and London are unaffected as yet, it seems, but a general downturn in the housing market would presumably affect everywhere, although the capital may manage to maintain its own property microclimate. However, according to the Telegraph, these recent developments - ostensibly linked to the credit crisis that has followed the Northern Rock debacle - are no bad thing for the buy-to-let landlord, current or prospective. The Royal Institution of Chartered Surveyors (Rics) told the newspaper that things are looking good for residential landlords. Rental yields have grown to record levels in the second quarter of 2007 and the body expects growth to continue into the third quarter of the year. Spokesman Simon Rubinsohn believes that many housebuyers are now "sitting on their hands" and that this means first-time buyers in particular "are more likely to sit tight and take a six-month rental contract to see how the market unfolds", something he believes "should give the buy-to-let market a further boost". He speculates that lending criteria are going to become much tighter, meaning some buyers will find it difficult if not impossible to get a UK mortgage. "It will get harder to get a buy-to-let mortgage, which could dent supply at the very time demand is on the increase," he claims, which means landlords with a property in the right place stand to make a killing. But will all this mean that buy-to-let investors are once again blamed for the inability of first-time buyers to access the housing market? It is an accusation frequently levelled at landlords - but an inaccurate one, according to one property investment website. A survey undertaken by propertyfinder.com concluded that economic conditions - such as repeated base rate rises - are to blame. Warren Bright, chief executive of the company, said: "Property investors make high profile scapegoats but are simply too small in number to be responsible."