Buy-to-let: a step-by-step guide ¦ Property Guides on Times Online

- Residential property investment as we know it today began in 1996 with the introduction of the buy-to-let mortgage, the brainchild of Andrew Reeves of the Association of Residential Lettings Agents (Arla) and a small group of mortgage lenders. Before then, the market had been dominated by professional landlords who funded their purchases with commercial loans. In 1999, total buy-to-let lending was £3.1 billion. By 2001 it had risen to £6.9 billion, and by 2006 to £38.2 billion.

- Since the buy-to-let boom began, the average UK house price has increased by more than 200 per cent, from £62,000 in 1996 to £198,000 at the end of 2007, according to the Halifax house price index.

- Research from Alliance & Leicester reveals that 71 per cent of landlords make a profit, while 29 per cent break even or record losses.

Related Internet Links

• Property guides

A guide to househunting on the web

Househunting goes high-tech: technology is transforming the way we search for our next home. Our buyers test-drive top property websites

• A step-by-step guide to selling your home

• Gumtree founder, Simon Crookall, puts his £1.5m home for sale online

Background

• Why can’t we sell our home?

• ‘I didn’t want a profit; I just wanted out’

• How to sell your home in a hurry

Background

• Overseas property: where, how and what to buy

• How to get onto the property ladder

• Guide to buying above a shop

Background

• How to sell your home

• Buying a property at auction

• Home improvement

• Eco homes

• Step-by-step guide to buying your first property

Related Links

• Buy-to-let: a step-by-step guide

- Rental yields have been falling steadily as house prices have risen: the national average rental yield in the UK was 6 per cent in December 2007, down from 10 per cent in late 2001. Average yields are highest in Yorkshire and the north west at 6.8 per cent.

- The past decade has seen an explosion in the number of amateur landlords, but the sector is still dominated by professionals: 13 per cent of landlords own 74 per cent of the total private rented stock. Around half of landlords are amateurs, owning fewer than five properties each.

- Just over 40 per cent of landlords are “accidental”: they came to the letting market by chance, choosing to rent out a property they had previously lived in, inherited, or which had been purchased for another family member who has since moved on.

- At present, one in ten households lives in privately rented accommodation, but the private rental sector is forecast to grow by 40 per cent over the next decade. Demand for rental accommodation will be driven by net immigration as well as the increasing numbers of singletons choosing to live alone.

- When it comes to overseas property investment, hearts rule heads: investors tend to opt for popular holiday destinations such as Spain and France rather than countries which offer the greatest opportunities for capital growth, such as Morocco, Hungary, Cape Verde, Poland and Montenegro.

- The National Landlords Association (NLA) estimates that there are now 50 Acts of Parliament and 70 separate sets of regulation affecting landlords covering such issues as health and safety and tenants deposits.

- Terms on buy-to-let mortgages have dramatically improved since the late 1990s: no longer are property investors required to pay four percentage points over base rate, nor do they have to put down deposits of 30 per cent of the value of the property. Today’s rates are comparable with standard residential mortgages, and it is possible to borrow up to 90 per cent of the property’s value.

Five useful websites

Times recommends

• Property seminars 'play on the ignorance of buy-to-let investors'
• How to hammer out a bargain
• A guide to househunting on the web