Opinions on the prospects for the 2012 buy-to-let market in the UK differ quite markedly.

On the one hand some think that with more people being forced to rent because of tighter lending requirements the market will continue to offer opportunities.

For others the worsening economic climate will lead to rental arrears, evictions and falling rents so putting a big dent in the buy to let landlord’s profits.

For an example of the former, the Telegraph reports that, according to estate agent Savills, buy to let landlords have increased their share of the market by 40% since the credit crunch kicked in.

And the Council of Mortgage Lenders has reported that there has been a 16% increase in BTL mortgages in the 2011 third quarter.

As home buyers, especially the first time buyer, are more and more forced out of the market they need somewhere to live. So there will be opportunities for the canny investor.

Further, with house building at a virtual standstill and a rising population (as far as the perception goes) then rents can only go one way, even if house prices remain stagnant.

But on the other hand, CityWire reports that the faltering economy will cause more evictions and falling rents.

It also reports that surveyors, who as part of the purchase process involving a mortgage had to supply an opinion of the achievable rent, are facing litigation as rents fall below that expected.

The report says that although conditions favoured the BTL landlord up to 2011, things will be different in 2012. “But landlords still have to weather the same economic climate as the rest of us. Stalled wages and rising unemployment are in the forecast for 2012, and their effects are unlikely to leave landlords untouched.” Says the report.

The real concern here is that when jobs begin to get lost, rental arrears start and BTL borrowers find it hard, if not impossible, to service their mortgages.

This is exacerbated when you consider that renting is now more expensive than servicing a mortgage says CityWire. So if the banks think that a mortgage is unaffordable, what does that make the rent?

Rental arrears also rose at the end of 2011 ending at 20% higher than a year ago.

So BTL may have been a reasonable bet for a while, but the outlook may not be quite so sunny.

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