Platinum Portfolio Builder investigates just how thriving the buy to let mortgage market is right now.

We’ve all heard of a baby boom but it seems that we could be on the verge of a buy-to-let boom according to Yorkshire based mortgage broker Meridian. With house prices creeping up it is possible that the buy-to-let market will be buoyant in 2012.

With expectations increasingly not been met on their investments and pensions, people today are using savings or equity in their main homes to start their buy-to-let portfolio – a popular tactic amongst serial investors. Mortgage brokers are finding that more independent investors are adopting this tactic due to the better rent yields available and the lower interest rates available from the banks.

Co-founder of Meridian Mortgages, Mr Derry Walton said,” Depending on where the money is invested, a yield of between five and seven per cent can be achieved, which is very attractive when compared to most other options.”

“More and more people are securing mortgages as lenders relax the criteria, for example, Woolwich has recently increased the amount it is prepared to loan on a buy-to-let mortgage from 60 to 75 per cent of value.”

It is becoming more apparent to potential investors that there are a number of schemes available, all of which are encouraging investors back to a now prosperous buy to let market that struggled 3 years ago.If you need proof that this is more than speculation, independent financial research company Defaqto found that the number of buy to let mortgage products on the market has grown by 104% over the last three years.

Whether a passive or hands on investor, many are regarding buy to let as a potential growth area.

Growth is exactly what lenders and investors alike are anticipating, as wide spread uncertainty regarding the wider housing market is fuelling rental demand. Despite the drop in house prices since the recession, first time buyers are struggling to secure a foothold on the property ladder, so now is the time to utilise the surplus of tenants looking to rent.

The result therefore, is that rental yields are generating better returns than many cash investments making it an increasingly attractive prospect for those lucky enough, at this crucial time, who can afford to invest.

John Heron , managing director of Paragon Mortgages explains, ”2012 seems set to be a more successful and challenging time for the buy to let and general mortgage market as the impact of Eurozone crisis and wider economic factors hit us. “However, it’s positive to see the level of optimism among intermediaries and the fact that more than half expect to increase their level of buy-to-let business throughout the course of the year.”

The result is that rental yields are generating better returns than many cash or equity investments, making it an increasingly attractive prospect for those who can afford to invest.”

From the view of an investor it is always useful that you consider expert advice prior to making cash intensive decisions with your savings, if you are a first time investor.

Choosing the right property, in the right location, at a good price where the rental demand is high is important in managing expectations of the possible yield achievable, to ensure your money is working hard for you.