Moving our attention to the rental market, figures from the Council for Mortgage Lenders reveal that buy-to-let lending for house purchases increased by 18.6% in 2013. Richard Lambert, CEO of the National Landlords Association, believes the key reasons for the boom are the low interest rates and a distrust of the stock market as a safe place to invest.
Separate research from BM Solutions/BDRC Continental Landlord Panel shows that landlords in the UK are seeking to expand their portfolios, with one-third aiming to do so in the next year. Approximately 80% of landlords make a profitable full-time living from their letting activity, the panel showed.
Confirmation of the buoyancy of the market comes from the Intermediary Mortgage Lenders Association. Its findings conclude that landlords looking to expand their portfolios and fix costs are driving a growth of remortgage activity in the buy-to-let market. Its report shows that nearly 25% of all remortgaging was focused on buy-to-let in the third quarter of 2013. It also highlighted the trend of landlords remortgaging to raise capital to buy new properties.
And the future for landlords looks rosy, according to Belvoir Lettings. It claims that the number of people choosing to rent property in the UK rather than buy a home in 2014 will drive up demand in the rental sector. The firm points out that some estimates indicate that the sector could make up 20% of the housing market by 2021.
Lobby group Million Homes, Million Lives agrees, although from a completely different perspective. It contends that the buy-to-let boom is creating 'generation rent'. It believes that half of all Britons could be living in rented accommodation in a generation - unless urgent action is taken to tackle the housing crisis.
Its report finds that owner-occupiers make up 65% of householders, down from a peak of 71% ten years ago. However, on current trends, only 55% of people are likely to own their homes by 2033, falling to 49% by 2041. The group calls for a housing revolution in which investors such as pension funds are encouraged to acquire property portfolios and allow tenants to buy the homes when they can afford it.