According to a report on Sky News yesterday, the situation for first time buyers in the UK is looking increasingly grim. The housing market is still fairly flat, but because lenders are insisting buyers have large deposits before they lend them any money, wealthy landlords are the only people who can afford to buy.
Average Financial Wealth
Research carried out by the Strategic Society Centre and published by Sky News indicates that the average landlord in the UK has around £75k whereas most first time buyers are lucky if they can raise £10k to their name. Since even a cheap property in some parts of the UK is currently on the market for more than £200k, clearly £10k is nowhere near a big enough deposit to secure a mortgage.
Growth of the Rental Market
The rental market in the UK is growing steadily. The number of households renting a home has risen by more than 2 million in the last thirteen years and this tremendous growth shows no signs of abating any time soon.
Boom Time for Landlords
First time buyers may be finding it tough, but landlords are cashing in on the demand for rental property. Existing landlords are taking advantage of the favourable economic conditions and expanding their property portfolios while interest rates are low and demand is high. First time landlords are also jumping on the bandwagon and investing in buy to let homes. And according to the experts, the private rented sector is going to play an increasingly important role in the future housing market, so if you have the spare cash, property is a far better investment than a UK savings account.
