/24-7PressRelease/ - LONDON, UK, December 24, 2007 - According to a survey from the Royal Institution of Chartered Surveyors, a glut of properties and the global credit squeeze has dampened the spirits of the buy-to-let market. The oversupply of properties has hampered the demand in the market and the credit crunch is making landlords quit the buy-to-let market.
Around 6.5 per cent of the landlords confirmed that they will be selling their properties once tenant leases expire. Jeremy Leaf, spokesman of the Royal Institution of Chartered Surveyors, said: "A combination of the tightening lending criteria and successive interest rate rises has started to hit the buy-to-let market, but with the drop in capital gains tax due in April next year, many landlords will resist selling until the spring. With rents still on the increase, many would-be-buyers will find accessing the housing market even more difficult as they struggle to raise the capital for that first important purchase."
As an effect of the credit crunch, banks and other financial institutions have tightened their lending criteria, discouraging new investors to enter the buy-to-let market. New landlord instructions, a key indicator of buy-to-let activity, fell below the long-run average in the third quarter of 2007. The third quarter saw just 11 per cent more chartered surveyors reporting a rise in landlord instructions against 19 per cent in the second quarter. Even the long-run average is 16 per cent.
However, a recent research from Alliance & Leicester indicates that over 70 per cent of buy-to-let investors in the UK are convinced that 2008 will be a good year for them.
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