Landlords are finally able to sigh with relief as a decision by the Bank of England’s Monetary Policy Committee has voted to hold interest rates again at 0.5%, last week.
In the last quarter of 2009, new buy-to-let lending had increased according to the Council of Mortgage Lenders. There were only 93,500 new b-t-l mortgages in 2009 (5.99%), compared to 346,000 (12.3%) in 2007. This slight movement is little consolation for landlords, and more so for landlords with large portfolios who borrowed heavily prior to the recession when it reached it’s peak in 2007.
With relentless banks seeking to recover loans, the stagnated landlord can only wait and hope the property market picks up some momentum in 2010. The Governments previous forecast that 240,000 new homes would be needed each year running up to 2020 to meet the requirements of UK residents has fallen drastically by the wayside, with only 118,000 new builds constructed in 2009 alone. It is still yet to be determined how the new coalition government will address this issue.
To ensure the country’s residential requirements, more focus and practical support from the lending community must now be directed to the PRS. Banks and lenders need to reduce the grasp that is currently strangling landlords and property investment in the UK. As trends this year have already indicated a rise in tenant occupancy, as compared to the homebuyer, the supply of residential accommodation will need to be met by the Private Residential Sector.