Property Investors on the Prowl

New figures from the Royal Institution of Chartered Surveyors confirm recent reports which could indicate that buy to let landlords and other people who want investment property are coming back into the market with a vengeance.

Thirty eight per cent of inquiries lately have come from people who are seeking an investment property. Seventy four per cent of inquiries came from people who already owned a home. The problems of finding a mortgage – and the necessary high deposit – continue to hit first time buyers. Less than 25 per cent of inquiries came from first timers.

One of the big drivers is that many people feel the property market is close to bottoming out and there are bargains – especially if the buyer has cash – waiting to be snapped up. The reports suggest that putative buyers wanted to view existing properties rather than new builds. There was also more interest in buying houses than flats.

On the mortgage front a range of new offers are beginning to filter through – in part due to the Bank of England’s continual slashing of the Bank rate. It’s now at a record low of one per cent and could well be cut again to half a per cent or even to zero.

The much battered Northern Rock – nationalised a year ago and whose parlous financial position provided a clue to the scale of the Great Crash to come – is reported to be getting back into the mortgage business.

Such a move would follow exhortations by the Chancellor Alistair Darling that the Newcastle based company should begin to emphasise its lending role. It was told that it could afford to slow down on the rate of its repayment of the government bail out which saved it from collapse. It was also told to slow down on its rate of repossessions.

When Northern Rock was engulfed by the crisis it virtually withdrew from the lending market and told its existing mortgagees who wanted improved deals to shop around with other lenders. It was also one of the lenders which was heavily criticised for not passing on in full the Bank of England rate cuts to its mortgagees.

One of its new competitive mortgages is being offered for a five year fixed rate term of 4.69 per cent. It is unclear what stipulations are being laid down about the size of the necessary deposit.