Is the Buy To Let Market Back?
2 minute read
The buy to let mortgage market has seen a boom in recent times, with an army of 2 million private landlords owning and renting out 5 million properties in the UK. A staggering 18% of households now rent from private landlords. These latest figures show a change in the British housing market, with more people now renting than buying. From the look of the latest figures this isn’t set to change any time soon, with predications indicating a further million homes over the next 5 years will be owned by investors. The British Government has even predicted that by 2032 more than 1 in 3 properties will be owned by private landlords. Buy to Let shot to fame during the housing boom of 2005-2007 as many individuals saw it as a “safe” way to invest your money and support your income. With thousands of buyers buying brand new flats without even viewing them. Then when the bust eventually came and the banking crisis set in, many younger buyers were prevented from buying and instead went into renting. With the plummeting interest rates many mortgage costs saw a cut and many amateur landlords manage to hang onto their properties even if they were in negative equity. As Britain has crawled out of the recession and the economy has start to stabilise, the buy to let boom has started to gather pace in the last few years; with mortgage lending rising at over 20% per year. But what does this mean for younger investors? Those who have moved out of home and are stuck in the renting market? With more seasoned investors buying up the houses in the property market, will they be able to compete? With many mortgage companies looking for a 15%-20% deposit, it’s a far cry of 2007 when nearly anyone could buy a mortgage with not a single penny towards a deposit. Although, it should be considered a blessing that those who can invest are heading back into the property market. More investors helps keep the economy going and ensures that many houses in Britain aren’t left derelict. With the opportunity for private landlords to rent to the public sector, it does also help those in the worst situations have a place to call home.