9
Nov
Lower income investors 'priced out of buy to let'
Rising deposits are making buy to let mortgage the preserve of the
wealthy, it has been claimed.
According to figures from the Royal Institution of Chartered
Surveyors (Rics) the average deposit for a buy to let mortgage now
stands at around £65,000.
This, Rics says, has meant that buy to let investments are out of
reach of lower income investors.
In 2002, the average deposit stood at £10,000.
David Stubbs, Rics senior economist, said: "It takes more capital
than ever to set up a buy-to-let investment."
However, Mr Stubbs added that rental yields are likely to rise over
in the next few months, and that deposits could be set to drop in
the face of falling house prices.
"Would-be investors who have missed out on the impressive returns
of previous years are now finding the hurdles to property
investment are higher than they imagined.
"However, existing landlords should be able to use the equity in
their past investment properties to fund the deposit needed for new
ones, and this should ensure that demand from the buy-to-let sector
does not dry up entirely," he said.
