The price of properties targeted by both aspiring homebuyers and buy-to-let investors has converged.
Data from the Mortgage Advice Bureau shows the average property value among aspiring buy-to-let borrowers fell from £225,234 in the three months to June to £212,362 in the three months to September, while the average property value for aspiring homebuyers rose from £205,484 to £214,615.
That leaves a gap of just £2,253 between the properties targeted by would-be homeowners and buy-to-let borrowers between July and September, compared to £19,750 in the previous three months.
Aspiring buy-to-let borrowers also had an average loan requirement of £139,285 – 9 per cent less than the £152,539 sought by aspiring purchase borrowers.
Brian Murphy, head of lending at Mortgage Advice Bureau, comments:
“A drop in the average property valuation among aspiring buy-to-let borrowers suggests that appetite for investing is focusing more on the lower end of the property market. Like homeowners, existing landlords will also have benefited from recent equity gains and this may be helping them put up more of a deposit and scale back their borrowing needs.
“While the supply of housing is stretched, there will always be a sense of competition for property. The country needs a healthy rented sector to meet the full range of consumer needs, particularly among people who may be studying or need the flexibility to move for work, and positive actions to meet house building targets will give both homeowners and landlords more room to breathe.”
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