Press Release Summary = If recent reports are to be believed, the buy-to-let market in Britain is booming. Ever-increasing house prices coupled with a lack of housing stock for sale means that many people, especially young professionals and first-time buyers, are finding it difficult to get their foot on the property ladder. Their situation has not been helped by a rising interest rate - the Bank of England has increased the base rate three times since August 2006 and all the signs indicate that they will do so again in May.
Press Release Body = If recent reports are to be believed, the buy-to-let market in Britain is booming. Ever-increasing house prices coupled with a lack of housing stock for sale means that many people, especially young professionals and first-time buyers, are finding it difficult to get their foot on the property ladder. Their situation has not been helped by a rising interest rate - the Bank of England has increased the base rate three times since August 2006 and all the signs indicate that they will do so again in May.
This is because, according to government figures, the rate of inflation topped three per cent in March. Three per cent is the upper limit as designated by the chancellor of the exchequer and the Bank of England is required to take steps to bring inflation back under control as soon as possible. High inflation means that, in real terms, many things become more expensive than they were. This in turn can cause the workforce to make demands for higher wages, as well as increasing export costs and harming the national economy.
One measure used to combat inflation is to raise the base rate of interest - this in particular is what prompted the January rate rise, as inflation was running close to the upper limit then. Some leading economists told the Daily Telegraph this week they expect to see interest at 7.5 per cent by the end of the year. If, as many analysts predict, the interest rate goes up again in May, it may make the cost of a mortgage prohibitive for a significant section of the house-buying demographic.
For the buy-to-let investor, more people looking to rent means a buoyant market and maximum income. This may be one reason why a recent study concluded that buy-to-let is no longer the exclusive domain of the \"professional portfolio landlord\", but is increasingly being seen as \"a good alternative means of saving for retirement\". The Mintel research found that there are over one million buy-to-let landlord operating in the UK at the moment- but predicted that this figure would rise to two million by 2010.
\"Increasingly, property owners are seeing the benefits of investing in bricks and mortar and often regard the second homes market as a good alternative means of saving for retirement,\" said Paul Davies, Mintel senior financial analyst, adding: \"As long as these trends continue, future growth in this market should be guaranteed.\"
2022
