Speculation is rising that growth in the rental sector is set to take off because housing is becoming so unaffordable.
Whilst the general consensus is that rental income is set to rise with the demand for rental property, industry commentators are urging caution for potential buy to let investors.
Our View
Buy to let is a huge commitment, especially if you have to borrow to afford the purchase. House prices are at record highs and mortgages to afford the properties are generally large. This means that repayments on mortgages will be high, resulting in higher rents needing to be achieved.
As interest rates rise, mortgage repayments will increase and put further strain on the need for rental income. Only go for buy to let if you can afford periods without rent!