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It’s not easy getting on to the housing ladder these days. Unless you have a large deposit and a decent income, most lenders will not give you a mortgage. As a result, Generation Rent has largely been priced out of the property market in many areas of the country, particularly London.
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But for those who are able to “think outside the box”, there is another way.
Buy to Let
Some young people are turning to the buy to let market as a means to an end. Instead of going down the ‘buy to live’ route, they have chosen to try ‘buy to let’ instead. Because they can’t afford to buy a property in the area they want to live in, they are taking advantage of the more relaxed buy to let mortgage assessment regime and buying a property in a more affordable area, and then letting it out.
Amateur Landlords Flourishing
According to Brian Murphy of the Mortgage Advice Bureau:
“In recent times a number of portfolio [large] landlords have become locked out of the market as lenders have restricted the number of properties they will lend on. In addition, for those new landlord borrowers, or those termed ‘amateur landlords’, who have perhaps two or three properties in the sector, is at its best since the onset of the financial crisis, with lower interest rates, higher loan-to values and ever more lenders providing choice.”
Buy to let is a great investment, but it is harder to get a buy to let mortgage if you are not an existing homeowner. However, there are lenders out there who will lend on this basis, so make sure you shop around.
