The number of mortgages taken out with a view to letting has risen to 1.42 million, compared to just 89,000 ten years ago – according to figures published by the Council of Mortgage Lenders. This equates to around £160 billion, an all-time high.
Some experts say it is evidence of landlords cashing in on younger earners’ inability to get a foot on the property ladder because of high property values and the requirement among many lenders for a larger deposit – sometimes up to 20%.
The only option for many is to rent, at a time when wages are either stagnating (many public sector wages are subject to a 2 year pay freeze), or are failing to rise in line with inflation. In addition, average UK rents have increased by 4.3 per cent to £718 per calendar month, while in London they have risen to £1047 PCM.
Until the situation improves for first time buyers, landlords – our buy to let insurance customers among them – are providing accommodation options for many thousands of young people. The challenges facing first time buyers in obtaining funding for a new home have created a great deal of opportunities for UK landlords, and until the barriers to buying property are lessened, it appears as if renting will increasingly become the norm. The UK’s approach to accommodation is arguably becoming comparable to countries like France and Germany – where buying a property is less common.
Remember, if you are a buy to let investor, you will need good insurance to protect your asset which is available from click4quote insurance.