The UK landlords are cashing in on the increasing number of buy-to-let investors as would-be first time property buyers are facing the wrath of restrictions on mortgages which are limiting them to private property rental sector.
A survey by the Council of Mortgage Lenders revealed that in the first nine months of 2012 £11.8bn worth of buy-to-let mortgages were agreed, a 19% rise on the £9.9bn in the same period of 2011.
Another survey showed that four out of five buy-to-let investors regard their property income as their pension. Around 61% plan to live entirely off their rental income when they retire, and 39% say they will choose a retirement date based on the state of the housing market and their investments” value, according to the National Landlords Association survey.
According to LSL Property Services, the rise in interest in property rentals comes as average rents in the private sector in England and Wales hit a high of £741 per month. The lowest average rents are in northeast England at £529 and the highest in Greater London at £1,092.
“Every pound monthly rents go up, there”s another pound renters cannot save for a deposit for their first home. This is lengthening their stay in rented accommodation and increasing competition in the private sector”, LSL director David Newnes, said.
Estate agent Savills provides better news for landlords with its 2013 forecasts on housing market. According to its report, average rents across the UK will rise 2.5%, and there will be mobile casino a cumulative hike of 18.2% between now and the end of 2017. The biggest rises will be seen in Greater London, where population and economic growth will be the highest in the UK. Rents will grow 26.4% in the next five years, says the report.
The forecasts are based on the assumption that mortgages remain evasive for first-time buyers. “The owner-occupier market is sinking deeper into the mire and dragging property prices down,” says David Whittaker, managing director of Mortgages for Business. “It”s great news for buy-to-let investors, able to snap up cheaper property, usually at a higher loan to value ratio because lenders are willing to advance more when property prices are lower.”