The property investment market is continuing to go from strength to strength, whereas the normal home buying sector is weakening and we can imagine that investment crowdfunding has taken a role in this. Recent statistics show an increase to 9% in lending to landlords compared to first time home buyers which have dropped down 3%, and normal home buyers.
According to The Council of Mortgage Lenders, there has been a slowdown within the housing market and their November 2014 statistics indicates that the overall lending to buyers has dropped by 7% to 55,600 mortgage loans in November. It’s natural that there would have been a seasonal slowdown which should have been taken into consideration. I mean who really wants to buy a house during the festive period? Chief Executive of Property Services Provider LMS, Andy Knee stated that the annual fall in lending to first time buyers is due to the stricter lending rules that were opposed in April 2014, which means barriers were put up to keep home buyers out of the housing market.
Statistics also revealed that there were 17,700 property investment loans in November 2014, which totalled up £2.4bn in lending. This is a result to a range of factors including a high demand for new tenants keeping the rental housing sector healthy and lenders slicing property investment rates. We can’t forget to mention investment crowdfunding as a theory either! However, the same can’t be said for first time buyers, as the overall loan size has decreased and the average gross income has increased. Therefore, affordability has become a strong factor and arguably, can be in relation to the increase in property investment for landlords. If first time home buyers are struggling to step onto the property ladder to buy a home, then they’re going to remain in the rental sector until they can afford to.
It will be interesting to see how the housing market develops over the next upcoming months with the new laws and legislation to the pension pots, which will take action from April 2015. Will property investment continue to take poll position or will first time home buyers put their foot down? Alternatively, you contact The House Crowd today for more information about how investment crowdfunding can help you step onto the property ladder.