A recent survey by Santander found that 55% of respondents do not expect to be homeowners when they have their first child, determining that today’s young generation of renters expect to fund the buy-to-let boom for generations to come.
This percentage is a result of the increasingly tight-grip approach banks now take to giving out mortgages, in a time of austerity, forcing many young professionals to prepare for years in the private rented sector. The number of first-time buyers in England has now, in fact, fallen to 200,000 per annum, a staggering drop, when you consider these numbers were at 600,000 in 1999 according to Jones Lang La Salle.
Conversely, buy-to-let mortgage lenders offer a much more free-handed approach, with £16.4 billion being lent to savvy investors, who saw the financial rewards and longevity of the market, in 2012.
This has not slowed down in the second quarter of 2013, with 40,000 mortgages worth £5.1 billion, being given to buy-to-let investors, according to data published by the CML; determining that both the number of buy-to-let loans, and the value of lending, were at their highest level since the third quarter of 2008.
Although rewards are strong for landlords investing in the buy-to-let market across the country, LSL confirmed in their buy-to-let index for April 2013 that rewards were in fact the strongest in the North West, where yields were highest. The index documents that the North West produced yields of 7.2%, topping London’s 5.0%, and an average rent of £568, outshining the average rents of near counterparts Yorkshire and the North-East.
Two cities which contributed largely to the North West’s table-topping performance, in terms of buy-to-let, were Manchester and Liverpool.
More purpose-built student accommodation has been heralded as the answer to an increasing demand for rental stock.
Real-estate adviser Savils Plc argued in a report that the ever-increasing amount of HMOs (Houses in Multiple Occupation) are inflicting a damaging restriction on the housing supply, making the call for more purpose-built student accommodation as a solution to free-up social housing and rental stock, one of critical importance.
Knight Knox International said that they are in agreement with this rallying call, having sold properties in areas such as Manchester and Liverpool where student demand and housing shortages are concentrated.
