"The volatility in the Buy-to-Let sector can indirectly affect the wider housing market. If fewer landlords are buying new properties due to financial pressures, this can lead to less liquidity in the market."
- Pete Mugleston - Online Mortgage Advisor
The Buy-to-Let market has faced some immense shifts over the past few years and the ripple effects are being felt by first-time buyers and those looking to relocate. Various factors are reshaping the landscape and understanding these changes is crucial for anyone involved in the sector.
The impact on first-time buyers
According to Pete Mugleston, MD and Mortgage Expert at Online Mortgage Advisor, for first-time buyers, the challenges are varied.
The tightening of the Buy-to-Let market often translates into higher property prices and increased competition. This strain is also affecting landlords as they face rising costs and regulatory pressures, and some are opting to sell their rental properties.
This, combined with a shortage of new rental properties coming onto the market, has led to a squeeze on housing supply, pushing up prices for those looking to buy their first home.
The recent rise in interest rates has added another layer of difficulty. Higher borrowing costs mean that first-time buyers are finding it harder to secure affordable mortgages and the increased cost of borrowing can stretch budgets thin and potentially affect the amount they’re able to borrow. This can delay homeownership dreams or force buyers to reconsider their property choices.
Challenges for those looking to move house
For those already on the property ladder but looking to move, the situation is equally challenging. Rising interest rates mean moving home can come with significantly higher mortgage repayments. If you’re selling a property and buying a new one, the increased cost of borrowing can impact your affordability and the size of the mortgage you’re able to take out.
The volatility in the Buy-to-Let sector can indirectly affect the wider housing market. If fewer landlords are buying new properties due to financial pressures, this can lead to less liquidity in the market. For those looking to move, it might mean stiffer competition for desirable properties, potentially leading to higher prices and a more stressful buying process.
How buyers and movers are adapting
Despite these hurdles, buyers and movers are finding ways to adapt. First-time buyers are increasingly considering alternative strategies such as shared ownership schemes or looking further afield for more affordable options. For those willing to explore different areas, there are still pockets of opportunity where property prices are more accessible.
In terms of moving house, many are opting for more financial planning and flexibility. Locking in fixed-rate mortgages can provide some stability in the face of rising rates, while a thorough financial review helps in understanding what is affordable and sustainable in the current climate. Some are also choosing to wait for a more favourable market environment before making their move, though this comes with its own set of risks.
