Duncan Lewis

Residential Property

Commercial Property

Official figures show its investors market with buy to let market booming touching record high

Date: (10 August 2012)    |    

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An official figure released yesterday has revealed that Britain was in the grip of a buy-to-let boom with landlord’s loans touching all time high of more than £160billion.
The figures were from the Council of Mortgage Lenders showing that there were 1.42 million buy-to- let mortgages, compared to just 89,000 a decade ago.
Experts said landlords were cashing in on the fact that a generation of young people was stuck off the housing ladder because of the crippling cost of buying a home.
The market for letting was booming with millions of young people unable to buy their own home left with no choice but to rent at an age when they would much prefer to be in their own property.
The average rent has jumped by 4.3 per cent in the last year to £718 per calendar month. This is just £2 below an all-time record, according to the lettings giant LSL Property Services
In London against all odds it has hit a record, average monthly rent of £1,047.
A report, which will be published today, highlights how rents kept rising in Britain because many would-be buyers continued to find themselves locked out of the sales market.
Over the last year, the Royal Institution of Chartered Surveyors said rents have jumped by 4.3 per cent, a much bigger jump than most people’s pay rises.
According to the pay experts Incomes Data Services many public sector workers were subject to a two-year pay freeze, and the average pay rise in the private sector was three per cent.
Peter Bolton King, global residential director of RICS, said that rents have grown steadily right across the UK for some time partly down to the problem of the scarcity of mortgage finance and the large deposits required by lenders.
The barrier to homeownership which was needed to be addressed; the previous 10 percent deposit required for an average first time buyer had risen to 20 percent due to the credit crunch.
RICS predicts rents will continue to rise over the next year, with many of its members, who are lettings agents, describing the market as ‘very busy’, ‘buoyant’ with ‘strong demand.’
Ed Stansfield, chief UK property economist at the consultancy, Capital Economics, said Landlords were having few problems letting property to frustrated would-be buyers.
A third of recent first-time buyers were over the age of 34 by the time they managed to get onto the property ladder, according to the Government’s English Housing Survey. It showed the number of households who were privately renting, such as parents with young children, has increased to its highest level since the 1970s.
There were 3.6million households who were privately renting from a landlord in 2010/11, the latest available figures, compared to just two million a decade ago.
Mark Harris, chief executive of the mortgage broker SPF Private Clients, said that it was not surprising that the buy-to-let sector continued to show strong performance.
With the would be first-time buyers found it hard to get on the housing ladder and more people turning to renting the sector had become increasingly attractive to investors he added