|
|
|
Buy-to-let boom breeds millionaires |
| Tuesday, 10th October 2006 |
An army of buy-to-let millionaires has been created by booming London property prices. |
The new breed of investors have day jobs but are making the real cash with shrewd wheeling and dealing in the property market.
In Central London, property prices are rising at the fastest rate in nine years, with a surge of 23.5 per cent in the 12 months to September.
The buy-to-let boom has also contributed to a 100 per cent increase in demand for London properties. The trend to buy-to-let has been followed in other British cities, and according to experts there is no end to the boom in sight.
The average buy-to-let investor owns 12 properties- usually in city centres- worth 1.54 million, research by mortgage lender Paragon reveals. Most investors have used the profits from renting out properties to cover mortgage payment while the homes soar in value.
Their profits have been boosted by the thousands of people who cannot afford buy a property and are forced into long-term renting. Many investors see their investments as a pension scheme for their retirement.
A typical home in Britain costs nearly £170,000, which is almost £13,000 more than the same property would have cost last year.
The number of buy-to-let mortgages has soared to nearly 770,000, worth £84 billion. Between January and June, 152,000 buy-to-let mortgages were taken out.
Michael Coogan, of the Council of Mortgage Lenders, said the housing market was ârobust, underpinned by strong rental demandâ.
|
|
|
|
| |
