Landlords reap mortgage rise rewards

Buy-to-let property investors are benefiting from increased mortgage costs, which are forcing more potential homebuyers into rented accommodation.

According to a new report from the Institute of Housing (CIH) and the Building Societies Association (BSA), it is more expensive for a first-time buyer (FTB) to get onto the property ladder today than it was in 1990.

The average FTB today spends 35 per cent of their income on mortgage costs, while in 1990, at the peak of the last housing boom, that figure was just 34 per cent.

However, rental prices have not increased at anything like the same rate that mortgage rates have, meaning more people are turning to rented accommodation.

"With first-time buyers finding it increasingly difficult to get a foot on the housing ladder, the private rented sector is providing accommodation to increasing numbers of people" said Adrian Coles, director general of the BSA.

"Through the provision of loans to landlords, building societies are helping to ensure the success of the private rental sector," he added.

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