Landlord loans high
BRITAIN is issuing the largest number of 'landlord loans' since records began, official figures have revealed.
One in eight mortgages is now a buy-to-let loan deal — an all-time high.
Of the 11.3 million mortgages in this country, 1.44 million are buy-to-let loans, rather than standard residential mortgages.
A decade ago, there were only 275,500 buy-to-let loans, equal to just 2.4 per cent of the entire market.
Today the number of buy-to-let loans is equal to 12.7 per cent, according to the figures from the Council of Mortgage Lenders.
The change is partly because a generation of young people have been locked out of the housing market by soaring house prices.
With an average house price of nearly £160,000, which is more than six times higher than the average salary, a generation of young people cannot afford to buy their own home.
To make matters worse, the average monthly rent has climbed to £741 per month, which inhibits their ability to save money every month towards a deposit.
Estate agency organisation, Home Sale Network surveyed their members to find out.
Chris Hope of Swansea's Dawsons estate agency says the rental market appears to be thriving, attracting more and more prospective tenants.
He adds: "This is a really hot topic at the moment as we see more people entering the rental market."
One survey by the Home Sales Network which Dawsons is a member of asked: Who pays more per month; the tenant renting a property or the buyer paying a mortgage?
Nearly three quarters of respondents said it was the tenant.
A further 60 per cent said the gap between monthly mortgage and monthly rental payments was now the biggest it has ever been, with rental rates being higher.
"This would suggest that as demand in the rental market increases, so too are rental rates. Encouragingly however, it also would appear that for those who can secure a mortgage — in the long term — buying is cheaper than renting.
"A staggering 94 per cent of surveyed agents stated that the average rental rate was up to 30 per cent more than the average monthly mortgage payment."