I don't know about you but I found the latest report by the Joseph Rowntree Foundation, concerning young people's attempt to get their foot on the property ladder, grim reading.
Record house prices and high property inflation have left individuals and couples aged between 20 and 39 facing a real uphill struggle to buy a home. The gap between the price of a house and average income is now as great as it was in 1990 – the peak of the last housing boom. And we all know what happened soon after that!
But the current climate means an ever-increasing number of people have to find, or remain in, rented accommodation and that spells good news for the buy-to-let sector.
According to eMoneyfacts, the number of buy-to-let mortgage offerings available to the UK market through its online sourcing system has broken the 2,000 mark for the first time ever. It estimates that since the beginning of 2006 the number of intermediary and direct business mortgage products available to customers has increased by 50%, and 100-fold since 1997.
The CML says landlords took out 152,500 mortgages in the first six months of 2006, up 56% on the same time last year, and setting a new record.
Lifestyle choices have also helped fuel the boom in buy-to-let. There are more single people and a lower birth rate, partly because people are nowadays more likely to put off having a family until later in life. More divorce and less stability in many other long-term relationships have contributed, as have other demographic factors. The student population in the UK has been growing for a number of years, and renting is typically the most popular form of tenure for students who usually require low-cost, short-term accommodation.
Immigration is also having an impact. The percentage of households under 30 years of age buying with a mortgage had declined from 40% to 34% while conversely the proportion of those renting privately had risen eight points to 41%.
Buy-to-let landlords have traditionally been quick to respond to changing market conditions. Individual lenders are also expanding buy-to-let product ranges to meet demand in the sector. Even specialist lenders have as many as six times the number of buy-to-let products on offer, according to the eMoneyfacts research.
With house price rises now locking out half of new young buyers, buy-to-let investors could well be the winners for some time to come.
Sally Laker is managing director of Mortgage Intelligence.
The views expressed are those of the author and not those of the company she represents.IFAonline
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