According to the Council Mortgage Lenders (CML) mortgages given to private landlords jumped 16% to £3.8 billion in the third quarter of 2011.

It seems many buy to let investors have taken advantage of weak prices and strong rental returns over the past year and are returning to the marketplace to expand portfolios.

Statistics from LSL property services have shown that rental prices have increased by almost £50 a month since 2008 and this of course is very appealing to buy to let investors.

This rise comes as more potential home buyers are forced in to rental properties,this is due to difficulties raising large deposits now needed and also the lack of mortgage availability for many in this current climate.

As the retail market has seen a boom and house prices have generally remained stagnant, lenders have again began expanding deals in this particular sector.

According to property website, Rightmove, there are nearly 3 times more buy to let mortgage products available now than 2 years ago.

Competition is the buy to let mortgage market has intensified, as Yorkshire Building Society have announced a relaxation in their lending restrictions for buy to let investors.

This particular lender only entered into the buy to let market in August 11, they offered products through Accord mortgages. However these products were only available in London and the South East.

The Yorkshire Building Society has now announced it intends to role out their products across England and Wales. The changes to its buy to let criteria to include dropping the minimum required property value from £150,000 to £100,000 and also reducing the minimum income on applicant needs to earn, from £35,000 to £20,000.

It has also decided to cut the inimum age of applicants by 5 years, from 30 to 25 years.

Jeremy Law, head of buy to let at Yorkshire Building Society stated that ,”we do not see ourselves as dipping in and out of the market, we are very much here to stay and will be an active lender in the market all year round.

Other experts have suggested that this particular move represents the lenders next step is its staged entry in to the buy to let market.

Platform, a part of the Co-op Bank has also said it will be lending at least £600 million in buy to let loans in 2012, this it said was due to incertaints in the wider housing market fuelling rental demand.

With new deals and relaxed lending criteria it seems landlords and letting agents could be set for another bumper year.

The Paragon Group, a buy to let lender,suggests that “landlords are expecting tenant demand to increase further this year”.

Nigel Terrington, chief executive of Paragon Group also added “with the success of 2011 to build on, I believe the private rented sector will continue to perform and provide a valuable tenure choice for even more people in 2012”.

Mounting pressures on the global economy, with politicians seemingly helpless to get to grips with the euro zone crisis, has reawakened fears of a double dip recession and not just for Europe but around the world.

This economic uncertainty is therefore reflected in the worlds housing markets, during the third quarter of 2011 house prices fell in 54% of the countries that are monitored by the global house price index.

The Knight Frank global house price index, which tracks the worlds mainstream housing market performance, showed zero growth in June to September of 2011. This was the weakest growth performance since 2009.

The Knight Frank global house price index is the definitive means for investors and developers to monitor and compare the performance of residential markets across the world.

According to the global league table popular destinations for British holiday home owners such as Spain and Cyprus are suffering at present.

Some economic experts believe that the market in Spain has ground to a halt with many expats wanting to sell and no one wanting to buy in this particular economic climate.

Spain has approximately 1.5 million brand new homes on the books of banks that are basically unsaleable.

According to the league table of 51 countries surveyed, Ireland is firmly planted at the bottom; this is due to the average property losing 14.3% of their value in a year. It is also estimated that 1 in 6 residential mortgage holders in Ireland is either in arrears or has slipped in to negative equity.

Two other different surveys recently conducted about Irish property showed that house values in parts of Dublin alone have plummeted by as much as 61% from their peak in 2007.

Despite the turmoil that is facing PIIGS economies (Portugal, Ireland, Italy, Greece and Spain) some data suggests that their housing markets may be over the worst. Although prices have fallen over the last few years, it seems the pace of decline has slowed.

The French and Turkish property values however are up more than 6% annually, according to the table.

At the top of the price index at the moment is Hong Kong, were house prices are up nearly 20% annually, followed closely by Estonia who has seen a 14% annual rise in property value.

The UK finds itself in 30^th place on the price index table, with falls in property value of -0.5%.

The UK housing market however has remained stagnant; this is mainly due to the fact that house prices have being held relatively level because most people are on such low mortgage rates that they are sitting in their homes. Although this does suit the banks as they do not want a market crash leaving them with assets reducing in value.

Many believe that looking forward, housing prices worldwide are likely to show little improvement on the whole.

Although it seems that many lenders have been more competitive in recent months the amount of lending in the market has not increased and could therefore fall back further depending on how the euro zone pans out.

Therefore the trend for ever cheaper mortgage rates is on the turn, which points to rate changes.

Some analysts state that mortgage rates have been moving to and fro consistently over the last 12 months and therefore these are hardly revelations. It is also worth remembering however that there is still no movement in the Bank of England’s base rate.

Andrew Montlake, of mortgage brokers Coreco, has stated that “the potential upside of rates getting lower is a small one, while the downside of rates getting more expensive once more is much larger”.

The Bank of England’s financial stability report revealed that mortgage lending has seen a profitability drop since 2009 as mortgage rates have not reflected the rising wholesale costs. With this in mind the report suggests that it may be during 2012 that a significant increase in banks lending rates occurs.

However, the Bank of England’s report also added that many banks have significantly reduced their reliance on wholesale markets and as a result may adopt a wait and see approach before introducing any significant hikes in mortgage rates.

Even in light of this report many experts still believe that it seems we have now passed the lowest point in the current interest rate cycle and that it now seems a sensible option to look at locking in to a rate at the moment.

These experts are urging home owners looking for a new mortgage to consider longer term deals as 2 year deals, for instance, may mean that the borrower will have to re-mortgage just as interest rates rise.

Simon Collins, a technical manager at mortgage brokers John Charcol, thinks lifetime trackers and 5 year fixed rates now offer many borrowers good value.

The Co-op bank offers a 5 year fixed rate deal at 3.59% for those with a 25% deposit, with no arrangement fee and the Coventry building society also offers a 5 year fixed rate deal at 3.58% for those with a 35% deposit, but it does come with a fee of £800.

Tracker deals are initially cheaper and the HSBC offers a lifetime tracker with a rate of 1.89% above the base rate, giving a current rate of 2.39% and has no arrangement or exit fees meaning when the rate raises it will be easier to switch to another deal.

David Hollingworth, of mortgage brokers London and Country, states “the bottom line for borrowers at the moment is that they could see rates continue to rise, so if they are considering a switch it would make sense to make a move sooner rather than later. As funding becomes scarce and costs rise, it is inevitable that the current upward trend in mortgage rates will continue”.

Family finances are under a much greater pressure than ever before, thus making it increasingly difficult, and for some impossible, to make end meet.

With all the economic doom and gloom many households are now having to prioritise their bills each month just to get by. On top of the priority list is of course rent or mortgage payments.

Recent research, commissioned by Shelter, a housing and homelessness charity, has shown that more than a third of Brits are cutting back on food in an effort to keep the roof over their heads.

This research has also shown that 22% of people, the equivalent to 10 million people in the UK, have also turned off many un-needed electrical appliances and turned down or in some cases turned off their heating in a bid to reduce their energy bills. This too is in order to help pay their rent or mortgage.

Many experts have stated that if these particular research figures were to be projected nationally they would equate to approximately 16 million people cutting back on food spending and approximately 10 million people reducing their fuel bills in order for them to cover their mortgage or rent bills.

Just over 1 in 5 people who were asked to take part in this particular study said they had spent less on gas and electricity in the last 12 months to finance their housing payments. This figure has increased by 60% since similar research was carried out in around 2008.

Graeme brown, director of the Shelter charity in Scotland, has said of the results of the study that “we fear that the results will mean even more families are forced in to poverty, with some facing the very real threat of homelessness”.

This research demonstrates the tough choices many families are now having to make between heating their home, putting a decent meal on the table or paying for the roof over their heads.

Other data on a similar subject has also warned that 1 in 7 Britons have turned to credit to help cover their rent or mortgage payments, such as unauthorised overdrafts and pay day loans.

This figure equates to almost 7 million, when projected on a national scale.

Financial experts have warned that relying on such methods could lead to people losing their homes, as these loans are intended only for short term use and are an unsustainable way of paying for housing.

All of these figures become even more alarming compared with the fact that mortgage payments at the moment are at their most affordable in years. It therefore raises the big question that if households are currently struggling to pay for their housing, what will happen when the Bank of England base rate

Although many aspects of the property and mortgage market have been seemingly encouraging in recent months, with Barclays for one relaunching into 90% loan to value (LTV) mortgages and the Nationwide also improving their availability of high loan to value (LTV) loans.

David Hollingworth, of mortgage brokers London and Country, stated that “the continued problems in the euro zone have resulted in an increase in funding costs for lenders and that is feeding through to the UK mortgage products”.

The Nationwide building society announced in December 2011 that some of their borrowers were to face paying around 60% extra on their mortgages from March 2012.

This has happened as the Bank of Ireland was forced to sell some of their assets to Nationwide and therefore around 14,000 Bank of Ireland customers were transferred to the Mortgage Works group, which are a part of the Nationwide.

Borrowers with the Bank of Ireland were on the banks standard variable rate (SVR) of 2.99% once they were transferred however they found out that they would see their rates soar as the mortgage Works standard variable rate (SVR) stands at 4.79%.

An interest rate rise like this could mean that a £200,000 mortgage could go up by £300 per month and therefore be catastrophic for many households.

Ray Boulger, the senior technical director at mortgage brokers John Charcol, said of this move, “I imagine recipients will be very worried. A potential increase of this magnitude in only 2 months will be a massive shock”.

However these borrowers seem to have been given fresh hope, as the Mortgage Works is said to be considering moving the rates up in stages rather than the initial idea of switching the borrowers straight over to the higher standard variable rate (SVR), instantly.

A director of mortgage advisers ‘Your Mortgage Decisions’, added he was equally concerned and stated “I struggle to understand how doubling someone’s mortgage interest rate will not cause a rate shock even if done over many months”.

Brian Murphy, of mortgage brokers ‘Mortgage Advice Bureau’, said “even though the proposed SVR looks high compared to the starting position, some borrowers will have little or no equity, so many will find it difficult to move anywhere at present”.

Many experts believe that if the Nationwide building society wants to retain as many customers as possible it would be in their best interest to let borrowers know quickly of their alternatives.

Although how easy it will be for them to re-mortgage will depend on their loan to value (LTV) ratio’s, credit status and also if the borrowers are on an interest only deal.

Eddy Weatherill, of the independent banking advisory service suggested that “at the moment nobody trusts bankers. We need good standards of service and ethical behaviour to change that”.

This move to nationalise the bank signalled the start of the financial crisis.

The bank it seems was more vulnerable to a credit crunch than most, this was mainly due to its ‘high risk’ business model which depended on funding from the wholesale credit markets, with 75% of their funding coming from this source.

Lehman Brothers and Bradford & Bingley tabled bids for northern rock, however both of these bidders also later fell victim themselves to the banking crisis.

It then appeared that people again began to see Northern rock as a safe to put their money, given its status as a nationalised bank and there was a subsequent surge in the number of accounts opened.

Official figures reveal that the nationalisation of Northern rock added approximately £87 billion to the public debt.

During 2011 the government again encouraged another round of bidding for the bank, and in November 2011 it was announced that Virgin money holdings was to buy the bank for a figure of around £747 million.

When the bank went in to public ownership it was spilt in to 2 separate companies; the first (the ‘good’) contained the banks retail and wholesale deposit business and offered new savings and mortgage products. The second (the ‘bad’) retained the balance of the banks more risky mortgages, the government loan and other borrowings.

The sale of Northern rock to Virgin went through in January 2012 (subject to approval, it was only for the ‘good’ part however with the ‘bad’ still owned by the tax payer and the treasury, who says it has no plans to sell.

While Virgin is paying a massive £747 million for the bank it is far below the £1.4 billion of the taxpayer’s money which was used to bail out the bank in the first place. The expected £400 million loss is the equivalent of £13 for each of the nation’s 30.6 million taxpayers.

George Osborne has welcomed the sale and said it was ‘an important first step in getting the British taxpayer out of the business of owning banks’.

The treasury added ‘the sale was in the best interest of the taxpayer, not least in that it created a high street competitor for the big banks’.

The deal includes 2,100 staff, 75 former Northern rock branches and a £14 billion mortgage book and £16 billion of savings.

A spokesman said that there would be no changes to terms and conditions for Northern rock customers.

Virgin money has pledged to shake up the banking market with the deal.

Northern rock is the first nationalised bank to be returned to the private sector.

Although the deal means the government are to loose hundreds of millions on the deal, they still claim that it represents the best deal for the tax payer.

On top of all this, it seems that there is also a significant number of people still finding it hard to get a mortgage and the is of course the threat that banks ability to lend to home buyers may be affected by difficult wholesale funding conditions.

However, on a brighter note, according to figures from the Bank of England mortgage approvals in November 2011 were seen to rise to their highest levels in almost 2 years.

Many economists had forecast a fall in approvals for November 2011 to 52,500 from Octobers figure of 52,800. The data showed however that mortgage approvals actually rose to 52,900.

These figures represent the second monthly rise in a row and also the highest figures overall since around December 2009.

Andrew Goodwin, senior economic advisor to the Ernst and Young ITEM club, stated “we can derive some encouragement from mortgage approvals holding firm in November” he then went on to add “by that stage the escalation of the euro zone crisis had begun to exert pressure on the banking system, so we could easily have seen approvals slip back”.

Other economists have also welcomed these figures as they believe that in general they continue the trend of the past 6 months and therefore they feel that activity is gradually picking up.

However, Howard Archer, chief UK economist at HIS Global insight, insisted that “the modest rise in mortgage approvals to a 23 month high fails to mask the fact that the housing market activity remains very weak compared to the long term low and has been unable to develop significant upward momentum”.

Despite this rise, it seems that mortgage approval levels as a whole have remained significantly below the 88,000 monthly average since in 1993. Before the 2008 financial crisis, figures show that at their best mortgage approvals ran at around 90,000.

The number of loans approved for home owners wanting to re-mortgage had declined for the second month in a row in November 2011, these loans were at 31,154 the lowest since June 2010.

Net mortgage lending also came in below many experts expectations, they had forecast a fall to £900 million, it actually halved to £600 million in November from £1.2 billion reported in October 2011.

These experts now believe that the threat of a renewed credit crunch is likely to weigh down on lending in the coming months.

Samuel Tombs, UK ECONOMIST AT Capital Economics, added “we fear that approvals for new house purchases might soon start to fall as banks further restrict the availability. And raise the price of credit in response to the deterioration in wholesale funding markets”.

Some people believe however that predicting the housing market is ‘nigh on’ impossible, as how can anyone predict ‘stability’ for example.

Lloyds TSB, the state rescued bank which is 41% owned by the government, is being forced to sell some of its branches under European Union competition rules. These rules ensure that competition with in the EU is not restricted or distorted.

The Co-op has beaten off competition from NBNK investments, as they offered a smoother transaction. A spokesman for NBNK stated that “the company regrets that it was not given the opportunity to create a break with the past, delivering to the high street a well capitalised, new challenger bank and brand devoted to providing the level of service that UK banking customers deserve”.

The deal includes 5.5 million customers and £83 billion in deposits and mortgages, on the stock market.

Therefore the takeover will take the Co-operative’s UK market shares from 2.3% to 6%, which in turn poses a much bigger challenge to the ‘big five’ banks which include Lloyds, RBS, Santander, HSBC and Barclays.

This deal will compliment the Co-op’s previous takeover of the Britannia branches and also their successful £200 account switching offer that lured in many more new customers.

The purchase of the 632 branches will triple the size of the Co-operative banks branches to 947 across the UK.

The Co-operative will in turn boast more than 6% of all UK current accounts, creating a major new ‘force’ on the high street, comparable in size to the Nationwide building society. It will also see the bank gain a much larger national presence.

Many experts believe this takeover will change the face of the high street.

Peter Marks, group chief executive of the Co-operative group, said “we have a clear strategy for driving the Co-operative group forwards. As part of that we have been working to build upon our strong foundations in banking to ensure customers have a real alternative on the high street”.

The bank has continued to go from strength to strength following the merger with Britannia.

News that the Co-op is to purchase branches of Lloyds has been greeted warmly by consumer groups.

Peter Vicary-Smith, chief executive of Which? Magazine, said of the takeover “if people are to get a better deal from their banks they need greater competition. People tell us they like the Co-operative bank and we think they can teach the other banks a lesson in good customer service”.

Director of financial services at consumer focus, Sarah Brooks, added “for big to be beautiful for customers, the Co-operative must provide good value products and great customer service”.

Competition between banks is flimsy at best especially on service, the industry regularly get a battering in the press for their treatment of their customers. A larger Co-op might just provide enough allure to see those dissatisfied by their current bank start to switch.

However the Co-op will need to look at their mortgage deals as at present their current standard variable rate (SVR) is one of the highest on the market at 4.24% compared to 3.99% from Lloyds, 3.94% from HSBC and 3.89% from Barclays.

One of the reasons that buy to let investors have not been hit as hard by the mortgage market is that many property investors do not need a mortgage or have sufficient equity to put off sizeable deposits, this also puts them in strong bargaining positions.

Lower house prices, rising rents and improving mortgage deals seem to be tempting buy to let investors once more.

Like any investments, buy to let comes with no guarantees, but for those who have more faith in bricks and mortar than in stocks and shares, the future looks bright.

David Newes, director of LSL property services, suggests that “the signs are already clear that 2012 will be a strong year for buy to let investors”.

Some experts also believe that anyone thinking of investing in property should do so in the next 6 months, as the parlous state of the recovery means an interest rate hike is unlikely before mid 2012 and therefore mortgage rates will remain low.

The recovery in the buy to let market still remains small against the demand seen in both 2006 and 2007; however the strength of this market has surprised analysts given the turmoil in the second half of 2011 with the euro zone crisis and also with the UK economy remaining pitifully weak.

Figures from the Council of Mortgage Lenders (CML) showed that in 2010 a total of £9.7 billion was lent to buy to let investors, it also showed that this figure was surpassed in October 2011.

The ‘high end’ estate agent Savills figures showed a jump of 40% in the number of homes owned by buy to let landlords. These figures also showed that nearly 20% of all residential properties are now owned by property investors.

Data has also shown that recently searches for buy to let mortgages surged in December 2011, up to 3,874. Many believe that this indicates that those now searching are more serious about actually taking the plunge.

The fact that more people are now interested in buy to let as an investment may be due to the fact that the yield that can be earned from buy to let, which was bolstered by fast rising rents in both 2010 and 2011, far exceed the yield to be earned from any savings accounts.

Some financial commentators however have blamed first time buyer’s inability to get on to the property ladder on buy to let investors.

The claim that buy to let investors are forcing first time buyers out of the market has been dismissed by at least one leading industry figure.

Matthew wyles, group distribution director for the Nationwide building society, said “it was stricter lending criteria and the requirement for a larger deposit which was causing difficulties for first time buyers and not buy to let investors snapping up cheaper properties to rent out”.

Ever growing numbers of first time buyers who have been unable to secure a mortgage have consequently pushed up rents by approximately 10% since the banking crisis struck in 2008.

Research by the property data firm, zoopla.co.uk, suggests that it now costs more to rent than it does to pay a mortgage on the same property in at least 47 of 50 biggest towns and cities across Britain.

This it seems is mainly due to persistently low mortgage rates and soaring rents. The cost difference between paying a mortgage and paying rent has grown by an estimated 50%. For example, based on a 2 bed roomed flat for sale/rent in November 2011 and a 85% loan to value (LTV) repayment mortgage at 5%, it would cost £866 a month to rent compared with a £794 a month mortgage.

With more and more of first time buyers income going on accommodation they are finding it much more difficult to save, thus making the prospect of home ownership even slimmer.

Some letting agent’s data shows that in October 2011 the average rent was around £720 a month, but this figure disguises the big variations around the regions, as in London for example, the average rent has reached a massive £1,030 a month.

The latest buy to let index has indicated that average rents have increased by 3.5% annually, this is despite a monthly decline and other figures have shown that the average property rental is now £25 higher per month than in November 2011.

LSL property services added that “the cost of renting is still rising annually at nearly twice the speed of the average salary and many tenants will need to dedicate a growing portion of their disposable income to the cost of accommodation over the next year”.

Shelter, the housing and homelessness charity, carried out a recent study which showed that due to high rental costs at least 1 in 7 Britons have turned to payday loans in order to cover their rent.

These particular loans are highly unsuitable ways of paying for housing as they are intended for very short term use as some can charge as much as 4,000% APR and can therefore lead to debts  ‘snowballing’ out of control.

Martin Lewis, of moneysavingexpert.com, said of this, “it is incredibly worrying there is now evidence of people using payday loans to meet housing costs”.

Some buy to let investors have commented to this by saying ‘while they understand the frustrations of first time buyers in the present housing market, buy to let is a business like every other and like any business legitimate expenses have to be met’.

In conclusion many estate agents across the country believe that the limited supply of rental accommodation means there will still be a strong upward pressure on rents in the early part of this year (2012).