The prospects of the UK becoming a nation of renters instead of buyers seems to be becoming ever more a reality as yet another crop of figures show just how difficult it is for first time buyers to find an affordable mortgage. At the same time property investors with an interest in landlord insurance are being wooed by banks and other lenders as they target the buy-to-let market.
Big increase in buy to let figures
A collation of figures for the first quarter of 2011 shows that lending to landlords went up by 25% compared to 2010 levels, with the same period showing a decline of 17% for first time buyers purchasing a property to live in. Although there are still at least double the number of people buying homes to live in rather than rent out, the gap is closing all the time and experts believe the second quarter of 2011 will show an even greater rate of properties being purchased under buy-to-let arrangements.
Banks targeting investors
There is little doubt that lenders are currently looking to property investors to keep the market going. Not only are they cutting rates on buy-to –let mortgages, the number of products available seems to be growing on a daily basis. At the moment landlords have the choice of almost 500 mortgages designed to facilitate the buy-to-let investor, and not only that, more and more property insurance brokers are offering cheap property insurance to go with their property purchase. There is no doubt that 2011 is rapidly becoming the year of the landlord.
First time buyers given a poor choice
In contrast to the acceleration of products available to landlords looking to expand their portfolios, the poor old first time buyer is left with a much sparser choice of mortgage. Approximately 270 products are on offer to first time buyers with a 10% deposit and even then the terms are not good. It is only when first time buyers can stump up a 25% deposit that deals become similar to the ones that many established homeowners find themselves with.
Average deposit around £40,000
It is also worth remembering that a 25% deposit on the average priced home in the UK works out at £40,000, not exactly the kind of sum young couples can easily find. No wonder then that landlords are seeing rental yields hitting all time highs, and of course the cruel fact for many prospective buyers is they are paying record rents to a landlord who has bought the sort of house they wanted but could not afford.