A continued fall in the number of people who are able to afford to buy their own home may be helping the buy-to-let market surge, as reports show it is now stronger than any other part of the housing sector.
According to data produced by Connells Survey and Valuation, the first month of the year has seen buy-to-let surge ahead of other sectors of the property market. It said that in January, activity levels in buy-to-let had grown by some 37 per cent when compared to the end of 2014, which was the fastest growth by far.
It also showed the smallest fall when compared to the same month a year before, with a drop of just four per cent year on year.
The only other sector that saw any sort of growth in activity levels was that for first-time buyers, although the three per cent monthly rise did little to offset the annual drop of 28 per cent in activity.
This health in the buy-to-let market means it has already managed to bounce back from the end of 2014, when it was struggling slightly thanks to a fall in demand among tenants throughout December. The quick recovery shows just how strong the rentals market is as a whole, which should once again give investors’ confidence for the rest of the year.
Looking at the reasons behind this return to health, one of the biggest factors has to be the fall in the number of first timers purchasing their own home. As well as Connells’ report showing a 28 per cent annual fall in activity, the latest official report shows that there was a drop in the number of buyers.
Data published by the Office for National Statistics claimed that at the end of 2014, the number of people who were able to buy their own home for the first time was falling thanks to a shortage of supply. More people trying to buy and a drop in the available stock meant that prices were pushed higher, making it unaffordable for many people to buy.
This, in turn, pushes more and more people towards the buy-to-let sector, which only makes the market even more favourable for investors.