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Be a part of the letting boom

17th February 2012

Tired of waking up every morning and going to work in a job you have no passion for?

Unfortunately we all have to find some way to pay the bills; however, some options seem more attractive than others. Becoming a landlord and using rental payments as your main source of income is becoming an increasingly common alternative to the drudgery of a nine till five job.

And now could be the perfect time to take the plunge and invest in a letting property.

Lee Gradin, director at Landlord Mortgages, believes wider economic conditions are amalgamating to create the ideal scenario for those who offer rental accommodation.

He said: "Predominately the rental returns are holding very well due to a general lack of supply of properties."

A mixture of a general housing shortage created by the many stalled projects caused by the recent recession and longer tenancies, mean that the probability of attracting a tenant who can pay the rent is high.

Even those with relative little savings can take advantage of these conditions.

"Lenders see buy-to-let to be a profitable mortgage for them, so they prefer to lend to landlords with a higher margin on the mortgage rates, than the highly competitive first-time buyer market," explained Mr Gandin.

He said that this increased demand was also bringing down mortgage rates, as more lenders compete for the lucrative business.

A recent survey from Paragon corroborated this trend, as it found buy-to-let mortgages now account for 2.3 per cent of its members' activities – up from 19.3 per cent 12 months ago.

However attractive the proposition looks at the minute, letting can be a tricky business for the uninitiated and those who have made the investment should take all the precautions they can.

A robust policy such as freeholder insurance will mean that any extra costs accrued repairing your property will be swiftly covered by the insurer, meaning that your vital profit margins are maintained.