FNB Estate Agent Survey – Buy-to-let Buying and Rentals
Buy-to-let home buying percentage stalls
After having edged up gradually in prior quarters, the 3rd Quarter 2014
FNB Estate Agent Survey pointed to a stalling in Buy-to-Let buying as a
percentage of total home buying. Agents surveyed still expect mild increase
in buy-to-let buying in the near term, but their expectations regarding the
magnitude improvement continue to taper.
The 3rd quarter 2014 FNB Estate Agent Survey pointed to a slight decline in
the significance of buy-to-let buying in the market, after prior quarters’
By this we mean that, as a percentage of total buying, buy-to-let purchases
are estimated by survey respondents to have edged down slightly from 10% in
the previous quarter to 9% in the 3rd Quarter. The decrease in the percentage
of buy-to-let buying stalls a previous small rising trend.
This percentage remains mediocre in comparison to the estimated 25% back
in early-2004 at the height of the property boom. Besides widespread
household financial constraints still being in existence, and often only
“masked” by very low interest rates at present, ongoing mediocrity in buy-tolet
buying is probably explained by the rental market’s strengthening to date
having remained modest, interest rates having started to rise, and tenants
having limited means in the currently tough economic environment.
Nevertheless, the buy-to-let percentage remains elevated from its lows of
around 2010, and this in a higher volume market too, so some mild
cumulative improvement has been achieved in recent years. This improved
situation has been supported by low interest rates, an improved period of
house price growth through 2012/13, with a portion of home buyers arguably
focused heavily on capital growth prospects as they perceive it, and not solely
on the rental income stream, and an improved tenant payment performance.