Granlords Looking To Buy To Let Market
Generation Of Renters Will Find It Harder To Buy
The new flood of buyers to come to the property market will be good for house prices if you already own your own home but one group of people who will be adversely affected will be the generation of people that rent their homes. With house prices now under threat of further inflation it will be almost impossible for these would be buyers to get on the housing ladder.
The new flood of buyers are pensioners that will be able to invest in the buy to let market as of from the 6th April when the new pension rules come into force. Pensioner who have been dubbed "Granlords" will be able to withdraw their pension pots and invest their money as they see fit and not have to rely on an annuity. You can have a look at the rule changes here and find out more.
The good news for wealthy pensioners is that they are now able to unlock their pensions and not be at the behest of pension providers who have been accused in the past of providing very poorly paid investment plans along with excessive charges. Pensioners can now invest their money in a buy to let property and join other shrew investors.
The problem is that they are likely to be buying flats and starter homes which is likely to affect first time buyers and the very people that the government is trying to help. Without a building programme of epic proportions we simply can't provide enough homes for these pensioners to buy and it looks ad though the end result will mean ever higher house prices.
The number of buyers that have been putting money aside to buy their first home fell for the first time last year as many of them decided that prices had risen to such a level that they felt it unlikely they would be able to afford a home at any time in the future. 43% of people aged between 20 and 45 years have been saving a deposit to buy a home but this figure by 6% for the first time last year.
It would seem that this generation of renters are starting to give up on owning their own property. This in itself would not be a major concern if renting a home was a realistic alternative for young people. The problem is that renting a home is more expensive than it has ever been and with our population continuing to rise this dire situation looks set to get worse.
Not only is renting a home very expensive but tenants are often left with a bad experience with poor accommodation and excessive agency charges levied by managing agents because the letting's industry is not regulated. Because there is a endless supply of tenants landlords are able to treat tenants with indifference.
Rents have risen faster over the last few years to eye watering levels and the industry is coming under further pressure from charities and other organisations who want the letting's market regulated by an ombudsman similar to the Financial Conduct Authority that regulates the financial services industry. Ed Milliband has already pledged to regulate the letting's industry by introducing rent controls and by limiting the charges that agents can levy of would be tenants before they move into a property. It is probably a question of when not if the letting's market is regulated as the number of complaints is on the increase and the pressure on whoever is in government is going to grow.