The two million buy-to-let investors in Britain have almost doubled their property assets in ten years.
Private landlords now hold around one in five properties in the UK, and it is expected that they will purchase another million in the next five years, says new research.1
This figure highlights the shifting housing market in Britain, as less people own their homes, and more are renting.
One in Five to be a Private Tenant in just Two Years
The report, from mortgage lender Paragon, indicates that 18% of households are now renting from a private landlord. This figure is increasing, as investors continue to view property as a secure asset, providing income and profit.1
The Government’s statistics estimate that by 2032, over one in three properties will be owned by private landlords.1
The Government’s 18 Years of Buy-to-Let report focuses on information from the period since the beginning of buy-to-let. 1996 was the first year in which specific mortgages were available for private landlords.1
During this time, the amount of properties bought for this purpose has doubled and is now worth £1 trillion.1
The sector grew in the housing boom of 2005-07, when property investment clubs thrived, and thousands of landlords bought new build flats, without even seeing them first.
The expected crash never followed. The banking disaster created a lack of mortgages for the younger generation, who moved into the private rental sector. Dropping interest rates made mortgages cheaper, and this allowed amateur landlords to hold onto their properties, despite being in negative equity.
The past few years has seen a rise in the buy-to-let sector, with mortgage lending increasing at over 20% per year, and the amount of landlord loans available is now over 700.1
Paragon support the market, saying: “The creation of buy-to-let has very much been a force for good. It has helped to shape a private rented sector that is fit for purpose and provides choice, value and flexibility for tenants.”1
The younger generation, however, do not agree. Dan Wilson Craw is from Generation Rent, a lobby group for tenants and housing reform. He says: “This sort of data shows how the market isn’t operating properly and has become a vicious cycle.
“More people are attracted to buy-to-let which drives up property prices, in turn trapping more tenants into renting for longer.
“There are parts of the country now where there really is no prospect of home ownership for many people, and it is difficult to see how that will change.”1