As a firm we’re still seeing healthy demand for buy to let property. Our HQ might be based in Colchester, but we service the whole of the UK and beyond. We’re still seeing strong demand for buy to let purchases, and even let to buy cases where a client rents out their current residential by switching it to a buy to let and then buying a new residential onwards.
Interest Rates Rekindling Investment Appetite
The reason for the continued interest in buy to let is due to a number of factors. Firstly, interest rates. We’ve seen a steady downturn in interest rates since late 2022. This ignites excitement in the market and again brings buy to let investment to the forefront of people’s minds when considering their next investment choice.
The Return of City Living
Also, city living. During those years we’d all like to forget between 2020 and 2021, working from home was the norm. Many people decided to move away from the city as, well, everything was shut! Now, the buzz and excitement of city life is back. With developers building in many prominent and up-and-coming areas throughout the UK, investors find new build properties a desirable choice. Often benefitting from a warranty, along with clean finishes and low maintenance, apartments in cities seem popular.
Affordability Pressures and the Role of Renting
Another factor is that whilst interest rates are coming down, and lenders are doing all they can to help people get on the ladder, some salaries and incomes aren’t meeting the required thresholds for some buyers to buy their dream property just yet. So, in the meantime what do they do? They rent.
It’s almost a rite of passage in the UK. People leave their childhood home, rent for a while, then buy. This is why it’s still so important that the private rental sector remains alive and thriving.
Savings Rates and Investor Decisions
Likewise, with the reduction of base rate with some further reductions anticipated throughout 2026, that usually also affects interest on savings. Again, investors might weigh up the returns between holding their cash, or putting it into property.
Lender Incentives Supporting the Market
On the whole, it’s nice to see the appetite still there in the buy to let market. Lenders offer good incentives, like some products having lower arrangement fees, or free valuations. We even see some elements of cashback or reduced rates for properties with high rated Energy Performance Certificates. Buy to let lenders are often looking with ways to improve their offering, and on the development side of things it appears that lenders definitely have appetite to lend, which can only ignite demand further.
