Will Build-to-Let Schemes Replace Buy-to-Let in the Housing Market?

Thanks to the turmoil of the financial world, partially stimulated by the credit crunch of the last year, the buy-to-let market is feeling the pinch in some areas. New landlords are finding that the profit realized from letting is not quite as lucrative as it was in the past. Housing prices are higher and so are the lending rates. Nevertheless, a profit is often still accessible, just in a smaller quantity than in the past.

While this fact does not seem to affect more established landlords, it does seem to influence whether or not someone new to the market can earn a living with traditional buy-to-let strategies. Property investors today need to take a look at their finances and whether or not they can make do with what is currently available by way of purchase prices for homes, interest rates for mortgages, and the current profit they can make in the buy-to-let market.

However, investors in property might be able to take advantage of a revived interest in build-to-let schemes. Such schemes offer a way for new investors with private money to enter into the letting market without risking their financial security. Unfortunately, the build-to-let schemes are only going to work for wealthy investors who have the ability to invest in large parcels of land, portfolios of properties, or shares in the property companies.

What affect will this strategy have on individual landlords? If renters are steered toward the professionally managed build-to-let properties, will there be any renters left to take advantage of the offerings of private investors in the buy-to-let markets?