x
By using this website, you agree to our use of cookies to enhance your experience.
STAY CONNECTED!
    
newsletter-button

TODAY'S OTHER NEWS

Buy-to-let “drives out first-time buyers”

Buy-to-let landlords are rushing to invest in the property market but first-time buyers are increasingly being squeezed out by high prices, new research suggests.

The number buy-to-let valuations jumped 33% in the year to May, while first-time buyer valuations fell 4% over the same period, according to latest research from Connells Survey and Valuation.

May’s buy-to-let valuations were up 3% on April, while valuations for first-time buyers fell 2% over the month.

John Bagshaw, corporate services director of Connells Survey & Valuation, said: “Britain’s buy-to-let market is booming right now as would-be landlords are eager to enter the sector and current landlords look to expand."

May was a disappointing month for first-time buyers but that spells yet more good news for landlords, Bagshaw said. "Fewer people looking to buy their first home means more tenants sticking to the rental sector.

“As such, new landlords enter the market and those already in the sector grow their business to capitalise on the increased demand.

“Yet what remains unclear is how long this contrast in fortunes will continue.”

May’s remortgaging figures also outperformed the overall housing market, with valuations up 9% on April’s figures. This equates to a 31% increase on the number of remortgaging valuations since May 2014.

Bagshaw said: “Remortgaging is going from strength to strength right now. Record-low mortgage rates are the main reason for this.”

Across all sections of the housing market, overall valuation activity for all purposes has grown by 3% on a monthly basis, between April and May.

On an annual basis, 13% more valuations were carried out than in May 2014.

  • Rob  Davies

    Yep, buy-to-letter hoovering up all the stock, leaving young first-time buyers priced out of the market. Yippee.

    Unfair and not sustainable. And do first-time buyers get any of the tax breaks and sweeteners that buy-to-let landlords get? Of course they don't. Apart from gimmicky rubbish like Help to Buy and Right to Buy, they're left high and dry.

    No wonder so many people from my generation are giving up on owning altogether. A shocking state of affairs.

  • Fake Agent

    Depressing, isn't it? Don't expect it to change anytime soon - buy-to-let is booming, and as long as the Houses of Parliament is full of private landlords, nothing will be done. Look after your own and all that.

  • Kelly Evans

    Lots of inverted snobbery here, what a surprise! Way you two are talking, you'd think every single BTL landlord is a multi-millionaire. Trust me, that's very much not the case. They're just trying to make a living like the rest of us. Some do it part-time, some full-time.

    When did entrepreneurial spirit and clever investment become such a crime? Anti-profit, anti-capitalism, anti-free market - you can see why the Labour Party didn't win.

  • Michael Lamoureux

    If normal hard-working individuals and families do not have the opportunity to buy their own home this will have dire consequences for British society and so called 'democracy'.
    When offshore funds and banks start buying up stock under any guise we will be going back to the days of Victorian squalor.

  • Jon  Tarrey

    This so-called property democracy that Cameron and his cronies want to create is utterly laughable when you see stories like this.

  • icon

    There are a couple of key points that seem to have been overlooked by the previous comments as they have been in the media.

    1) but to let does NOT drive out first time buyers. Investors buy properties below market value, they look to buy properties to which they can add value. If a first time buyer wants to buy the same property all they have to do is offer the market price or be prepared to do a lot of DIY / refurbishing.

    2) investors in buy to let generally want properties they can rent to mature families or convert to Houses in Multiple Occupation (HMOs) especially for students. These properties are NOT generally for first time buyers.

    3) Investors in buy to let are taking a risk. Many are taking risks that are too great. When interest rates rise, many will not be able to afford their repayments. If interest rates rise to their long term average ie 7% then many investors & landlords will more than likely get repossessed!
    Low interest rates are temporary and the average net yield / profit margin on a rental property is barely above the true rate of inflation even now. The media, tenants and in fact most new landlords do not fully understand the massive difference between gross and net profit. Gross profit looks very attractive. Unfortunately net profit is not.

    Why do people believe that buying a property is risk free? Forget the concept of "housing ladder" its "snakes & ladders". Interest rate rises will cause financial carnage, its just a matter of time.

  • Michael Lamoureux

    I agree Ian good point, imagine if the government did somehow achieve its new build targets and rental prices stabilised or even dropped slightly - combined with a hike in interest rates and many of the poor pensioners who cashed in their allowance to buy-to-let could potentially suffer badly. Be savy and clear your debt asap to remain in-pocket in the long term.

  • Michael Lamoureux

    Or do like me and live in a WigWam on a friends field, really helps when your paying on multiple BTL's :)

icon

Please login to comment

MovePal MovePal MovePal
sign up