According to a recent report there was a rise in first time buyers in the second quarter of 2012 compared to the same period in 2011. Before anyone gets too excited we must point out that the rises were in Scotland and Wales and not in England. The report was published by the Council of Mortgage Lenders and it also showed that in Northern Ireland first-time buyers took a larger share of the housing market.

In Scotland the picture was particularly positive. The number of first time buyers increased by 20% on the first quarter and 9% compared with the same quarter last year. The CML say that 4,800 loans were taken out by first time buyers, up from 4,000 in the first quarter of 2012. The number of loans to people moving house also increased, by 36% compared to the first quarter.

What this means for landlord insurance clients is anyone’s guess. Many will feel that if they can secure funding at attractive interest rates they should buy more properties. Others will be concerned about the possibility of property values falling.

Halifax has reported that house prices dropped in August by .4%, month on month. The mortgage lender reckons that prices are treading water and will continue to do so for some time to come. Another large player in the mortgage market, Nationwide believes that prices fell by .5% on a quarterly basis.

There are no easy answers in the buy to let business and potential landlords need to draw up business plans and cash flow forecasts taking in to account as many variables as possible. There are many different scenarios such as rents increasing/declining, interest rates going up or down and of course what happens to the capital value of your investment if house prices rise or fall.