17:18 PM, 18th August 2015, About 7 years ago
Almost half of young people believe that becoming a landlord is the best investment they could make, reveals new research.
As many as four million 18-39 year olds are actively trying to purchase a buy-to-let property in an attempt to cash in on the boom, according to research by letting agent Rentify.
The buy-to-let market is already outpacing the UK residential market and demand will increase as a result of a growing interest from young buyers.
With pension freedoms giving over 55’s greater buying power, attention has been focused on the buy to let market in the past months which could be another reason for the peaking interest from younger people.
A spokesperson for Discount Insurance said: “The fact that such a large number of younger people are actively attempting to get on to the property ladder through the buy to let market is great news.”
“It means that the BTL market should continue to see growth despite recent changes by the government to taxation and wear and tear allowance,” added the spokesperson.
Despite this positive outlook for the future of the BTL market, there are fears that banks are set to crack down on the amounts that landlords can borrow on what might be seen as more risky buy to let loans.
Loans could be restricted according to the borrower’s income, the size of the deposit put down and the proportion of buy to let loans to other lending on a lender’s books.
Banks are also insisting that landlords pass tough new stress tests which check to see if landlords are able to afford potentially higher monthly costs as rates rise.
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