How buy-to-let is changing your street

It was not so long ago when you could walk down any UK street and be hard-pushed to find a single "to let" sign.

To Let signs are much more common than a decade ago

These days, there are forests of them in some areas - well outnumbering homes for sale.

Behind the signs are a new breed of landlord, people who have lost faith in pensions and other investments to deliver, and are putting their faith in property.

People like Patrick Macvean, who has just bought his third property - a small Victorian terraced house in Chatham, Kent.

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Buy-to-let: is it still worth the gamble?

Rising interest rates are squeezing returns for buy-to-let investors, and anyone considering entering the market now should think carefully about how they are going to make money.

Mortgage lenders traditionally required a "buffer" of rental income cover in excess of the mortgage interest repayments. This was 130 per cent between 1998 and 2004 but fell to 127 per cent in 2005 and 125 per cent in 2006, according to Council of Mortgage Lenders (CML) figures.

This suggests that landlords are stretching themselves further in a bid to try to make money from their investment, and that lenders are becoming more lenient in the way they apply their criteria.

The two are a dangerous combination.

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Buy-to-let investors are suffering - should we be worried?

FOUR interest-rate rises in nine months and by all statistical accounts the message is filtering through: house-price inflation is coming down. But as borrowing costs increase, observers may have been prematurely worried about the effect on cash-strapped householders. It seems there is a group in the property market that is more sensitive to financial pressure than even first-time buyers: that is, buy-to-let investors.

Surveys from specialist lenders and investor groups have long maintained that stagnant, or even falling prices, would be no bar to the buoyant buy-to-let market. Some have even predicted that any price falls would be greeted with a investment-buying spree. But as the rate of growth slows (to 9.1 per cent annually, as reported by the Land Registry this week, or 6.7 per cent and on the way down, according to Home-track) agents say that buy-to-let investors are increasingly thin on the ground.

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