As anyone with a house to sell in the current market knows, it is nigh on impossible to find a buyer unless you are willing to drop your price and practically give your home away for free. Even if you are lucky enough to find a buyer willing to pay the asking price, or something in the region of, should you require a mortgage to fund your next house purchase, then the real fun begins!
Prior to the recession it was not that difficult to get a mortgage, which is why large numbers of people were able to borrow five or six times their income and subsequently end up in massive debt. But times have changed and with the collapse of so many financial institutions, lenders are understandable leery of handing over cash unless the borrower is able to put down a substantial deposit on the loan, and even then, many lenders are still baulking.
As a result of this difficult situation, a large number of people are being forced into the rental market—either because they can’t obtain a mortgage or because they can’t sell their home and are forced to let it out. Indeed, the latest research suggests that the average first time buyer is now a comparatively old 37 years of age.
The obstacles in the way of anyone wishing to own their own home means good news for landlords since the more people in the market for rental accommodation means higher rental yields and greater profits, which is why the average rent continues to rise and the buy to let market thrives. With the deepening crisis in the Eurozone, it seems likely that mortgages will become as rare as fairy dust and landlords can expect to see a steady supply of tenants beating a path to their door.
