Changes to Stamp Duty Land Tax and other tax relief cuts have been waging a war on landlords, who are dominating the market. However, buy to let property mortgages are continuing, balancing the odds somewhat.
The average fixed rate two year buy to let mortgage has dropped by 0.27 per cent down to 3.32 per cent, while the average five year fixed rate has dropped by 0.37 per cent to 4 per cent, it is reported.
Before the Stamp Duty Land Tax changes, there was seen to be an opportunity for landlords to take out buy to let mortgages, and as the demand rose, so did the competition, resulting in some very good rates for an opportunistic landlord.
This compared to first time buyers, who are struggling to take those opportunities, because of the difficulty in saving up for a deposit. Buy to let landlords are those who are (usually) already on the property ladder and have enough money to play the field in the market.
Unfortunately, when the two are looking to buy the same properties, it is the landlords who are freer and have a larger ability to play the market.
First time buyers do have the Help to Buy schemes to aid them on their way, but it hasn’t been enough to alter the market, whereas the market is changing to accommodate buy to let landlords.
The situation is lending itself to the ‘renting trap’ that young people are falling into. Homeownership is at risk of becoming thing of the past, as it becomes an unobtainable dream for young adults in the UK.