Buy-to-Let - UK - March 2008

Abstract

The private rental market has undergone a renaissance in the past decade, driven by the growth in buy-to-let mortgages. A market that was once the preserve of organisations, very wealthy individuals and those letting out single rooms has been transformed into a market largely occupied by property-owning individuals, most of whom are not professional landlords. By the end of 2007, there were over one million buy-to-let mortgages outstanding, valued at £122 billion, representing growth of almost eightfold in number and over 1,000% in value since 2000.

But could 2007 mark a watershed for the market? House prices are now anticipated to fall in 2008; the UK, along with other major economies, is experiencing a global credit crunch; and the prospects for the UK economy now seem weaker than at any time in the past decade. Can the impressive growth levels of the past seven years be maintained in light of these emerging economic problems and will landlords hold their nerve and ride out the storm? How much scope is there for further innovation in the rapidly maturing market? Will the global credit crunch radically change which companies are leading the market?

Drawing on a comprehensive range of information sources, this report seeks to answer these questions. The report additionally offers:

• an investigation into the internal and broader macroeconomic factors impacting on the market, including changing social and demographic trends
• an overview of the market' s competitive context, its strengths and weaknesses, insights and opportunities
• the views of leading experts
• an examination of recent and projected market growth
• an appraisal of the supply side of the market, including market shares of the largest lenders
• a review of product innovation, distribution and promotion
• an overview of general consumer financial activity
• the results of Mintel' s independently-commissioned consumer research, which offers insight into the leading characteristics, attitudes and behaviours of homeowners and (actual and potential) buy-to-let investors
• special further analysis (using cluster modelling) to enable deeper understanding of the core target market