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Buy-to-let boom shows no signs of stopping as landlords snap up property worth £160bn

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  • First-time buyers struggling to get onto the property ladder
  • 1.4million 'landlord loans' currently being invested into properties

Britain is in the grip of a buy-to-let boom, with landlords snapping up property worth £160billion.

The Council of Mortgage Lenders yesterday revealed that there are a record 1.4 million ‘landlord loans’ currently being invested into properties, as older Britons cash in on soaring rental demand from young people who cannot afford to buy their own home.

With low interest rates wiping out income from savings but making mortgage repayments cheap, a buy-to-let property, boosted by rents close to all-time highs across the country, can prove an easy moneyspinner for both amateur and professional landlords.

Boom time: Low interest rates coupled with soaring demand from young people who cannot afford to buy has led to a rise in the number of buy-to-let property investments

Boom time: Low interest rates coupled with soaring demand from young people who cannot afford to buy has led to a rise in the number of buy-to-let property investments

Older generation: Equity-rich buy-to-let landlords are emerging, opting either to rent to move or boost their pension plan

Older generation: Equity-rich buy-to-let landlords are emerging, opting either to rent to move or boost their pension plan The average rent is £711 per month, with Londoners forced to pay an average of £1,000, according to LSL Property Services, a chain of rental agencies.

Jonathan Samuels, chief executive of property finance firm Dragonfly, said: ‘Landlords are making hay while the sun shines. They can buy low and rent high, which is manna from heaven.’

According to the CML, when the buy-to-let market was in its infancy in 2001 landlords had obtained 185,000 loans to invest in rental properties.

Today, landlords have taken out 1.39 million loans, worth about £160 billion, to spend on their property empires, with an estimated 84,000 homes bought using specialist buy-to-let mortgages last year alone.

Paul Smee, CML director general, said: ‘Demand for rented property remains high.’

The buy-to-let market remains highly controversial as critics blame it for forcing up house prices to levels which many first-time buyers cannot afford.

Map of how many first-time buyers expect to purchase a house this year

First steps: Young people are finding it harder to get onto the property ladder as this graph, detailing the percentage of those who expect to buy in the next 12 months that will be buying for the first time, shows while the number of buy-to-let loans has ballooned, the number of mortgages to first-time buyers has nose-dived. During the past decade, the number of young people getting on the property ladder has collapsed from about 500,000 each year to 200,000.

Last year, according to lettings agent Countrywide, about 275,000 new tenants registered their interest in private rental accommodation – a 24 per cent increase on the previous year.

It said that a typical tenant is a couple under the age of 35, although the number of families is rising.

Nick Dunning, commercial director of Countrywide, said: ‘We are in the midst of a rental boom as renting has become the new norm.’
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