9 Nov

Lower income investors 'priced out of buy to let'

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.

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