Buy to Let Now 'Rich Man's Game'
The buy-to-let market is now so inaccessible to the average investor that only the wealthy can afford to be become landlords, according to The Royal Institution of Chartered Surveyors (RICS).The barriers to entering the buy-to-let market, driven by interest rates and levels of rental cover ratios for mortgages have made investment an unattractive proposition for vast swathes of the population.
Currently, would-be-investors need a deposit of £65,600 (30 percent of a property's value) for the average UK house in order to get a foothold on the buy-to-let ladder. This compares with just £10,100 (only eight percent of a property's value) required in Q1 2002 - a deterioration of over 500 percent in 5 years.
Commenting, David Stubbs, RICS senior economist said: "It takes more capital than ever to set up a buy-to-let investment. 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."
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