Buy-to-let market upbeat in UK as first time buyers struggle

Apparently, no time is better than for savvy Nigerian off-shore investors to move cash to UK as the buy to let market in the country is quite upbeat with demand for rental properties is increasing such that  new tenancies  went up by 15 percent in the last year.

A data from the latest Sequence rental index, which gives this hint, explains that there are not enough houses to buy so people are forced into renting and at the same time an increase in the choice of buy-to- let mortgages means that more landlords are increasing their portfolios in the private rental sector.

The data also notes that interest rates are not going to stay at their current historic low levels for much longer, saying, “there have already been hints that they could rise before the end of this year as the economic recovery in the UK has been more than expected; also, the government-backed Help-to-Buy schemes are not forever, they have a finite time scale”.

A new research on the country’s property market shows that a growing bill for stamp duty coming from property prices rise throughout the country has kept the first time home buyers struggling. Despite all the government aid in the form of Funding for Lending and Help to Buy, there are still a substantial number of first time buyers out there who struggle to put together the money needed to buy a home.

It is clear that for some potential first time buyers, home ownership is proving more difficult rather than becoming a more achievable aspiration and with house prices rising, those without a step already on the ladder are finding it harder to make the leap.

This comes at a time when home ownership in England, for example, has fallen to its lowest level in 25 years with figures for 2012/2013 showing that the number of owner occupiers has dropped to 65.2 percent compared with 71 percent a decade before.

According to an analysis from Knight Frank, house prices rose more quickly than earnings in the years leading up to the financial crisis, helping to push house price to income ratios to new highs and putting the hopes of home ownership beyond many and as a result some potential first time buyers are still struggling.

Concerns are also growing that new mortgage regulations in the UK will limit access for buyers. According to the Intermediary Mortgage Lenders Association, nearly two thirds of lenders and half of brokers are worried about the impact of new checks being brought in under the Mortgage Market Review (MMR) which becomes operational in two months time.