Buy-to-let: What does 2009 hold in store for landlords?
We have asked a panel of experts what 2009 will bring for buy-to-let landlords, and how they can structure their businesses to meet the dangers, and opportunities, head-on.
Last year was challenging for landlords. Many struggled to keep their heads above water, some went under, but a few turned market difficulties to their advantage and snapped up bargain properties.
But whether they are battening down the hatches, or looking for new opportunities, the big question for landlords is what 2009 holds. Telegraph Property Club (TPC) asked five experts for their views on the outlook for rents, property prices, base rate and the buy-to-let mortgage market.
They tell us who should be most worried, and in what circumstances landlords should be buying or selling. They also give warnings on where they believe the biggest dangers lurk, and how best to deal with them.
Simon Rubinsohn at the Royal Institution of Chartered Surveyors says that finding a buy-to-let mortgage will remain challenging for the first half of the year at least, with lending criteria continuing to be restrictive.
He says: "Wider spreads on borrowing costs will also continue, with buy-to-let costs elevated both in relation to the base rate, but also to ordinary residential mortgage rates. It will be more difficult for the buy-to-let guys because of the greater focus on rental cover in mortgage criteria, and the fact that lender expectations on that cover have shifted to reflect the uncertainties in the market.
"Rents are likely to continue to slip, reflecting excess supply and the poor economic background. The pressure has been most intense in larger houses, where we have seen a lot of new supply coming on to rent. With the weak sales market that area will continue to see more supply, as people who do need to move are still unable to sell.
"It will be a less powerful story than in 2008, but that area is still one where rents are most vulnerable. Partly because of that issue, and also because of job losses and wage pressures, London is seeing greater regional pressure on rents. The trend will be generally down, but London remains the most vulnerable."
For more views from Rubinsohn and the other panellists click on the links (right).
We also have a new buy-to-let calculator that allows landlords to work out potential returns based on the property's value, purchase costs and selling costs together with rents and mortgage costs. Again click on the link to have ago.
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