This article is an external press release originally published on the Landlord News website, which has now been migrated to the Just Landlords blog.
The buy-to-let market continues grow at a remarkable rate, according to new figures from leading mortgage lenders Paragon.
Changing dynamic
Research conducted by Paragon suggests that nearly 20% of homes in Britain are owned by private landlords. It is anticipated that buy-to-let investors will purchase a further million properties within the next five years, as the booming market shows no sign of slowing.
Approximately two million private landlords own and subsequently rent out around five million properties to tenants in the U.K. Official figures from the Government indicate that by the year 2032, over one in three properties will be owned by private landlords.[1]
18 Years of Buy-To-Let
Paragon report is entitled, ’18 years of Buy-to-Let,’ and draws upon information collated since 1996, the year where the investment opportunity came to the fore, with mortgages aimed at private landlords first accessible.
The report indicates that buy-to-let properties are now worth around a total of £1 trillion.[1] Buy-to-let investment accelerated between 2005-2007, with the housing boom leading a number of investors purchasing properties without even viewing them. However, the recession and subsequent banking crisis led to a drop in mortgages forcing young people to rent, thus increasing the number of renters.
Landlords own over half of new homes
Recent growth
Over the last few years, the buy-to-let market has swelled, with mortgage providers indicating an increase of over 20% per year. Landlord loans available are now in excess of 700.[1]
A spokesperson for Paragon embraced the findings of the report, saying, ‘ the creation of buy-to-let has very much been a force for good. It has helped to shape a private rented sector that is fit for purpose and provides choice, value and flexibility for tenants.’[2]
However, the figures have not been welcomed by some young aspiring homeowners, who feel priced out of the housing market. Generation Rent is a group campaigning for tenant and housing reform. Member Dan Wilson said on the report that, ‘This sort of data shows how the market isn’t operating properly and has become a vicious cycle. More people are attracted to buy-to-let which drives up property prices, in turn trapping more tenants into renting for longer. There are parts of the country now where there really is no prospect of home ownership for many people and it is difficult to see how that will change.’[2]
[1] http://www.landlordexpert.co.uk/2014/10/28/uk-landlords-own-over-half-of-the-new-homes-built-in-the-last-decade [2] http://www.telegraph.co.uk/finance/personalfinance/investing/buy-to-let/11179073/Buy-to-let-boom-one-in-five-homes-now-owned-by-landlords.html
