On Tuesday, the Council of Mortgage Lenders in the UK, announced that some one million buy to let loans had been taken out.
The second half of 2007 proved to be profitable for property investors looking for buy to let mortgages. The number of homes that were mortgages for the homes for rent market rose some 13.6 per cent in that time frame. Lending rose from £20.8 billion in the same time period for 2006, to £24.1 billion in 2007.
Many experts believe the key to success in the current market is to look at the long term. Property investors realize the potential in a falling housing market. More people, including first time home buyers must rent until they can afford to purchase, which allows more opportunity for investors.
House prices continue to be difficult in many areas for first time buyers. Additionally, lending criteria continues to tighten. For example, Nationwide Building Society announced it was now requiring that buyers have at least 25 per cent down to secure their mortgage.
There is a strong demand for property that can be rented by tenants. While this trend continues in the UK, other housing markets throughout Europe follow suit. Investors in countries as far away as the United States and Australia are also seeing a rise in property investors using buy to let properties for profit.