The buy-to-let market is now so inaccessible to the average investor that only the wealthy can afford to become landlords, says the Royal Institute of Chartered Surveyors (RICS).
Interest rates and levels of rental cover ratios for mortgages have made investment an unattractive proposition for vast swathes of the population. In the current climate, would-be investors need to lay down a deposit of £65,600 (30% of a property’s value) for the average UK house in order to get a foothold on the buy-to-let ladder. This compares dramatically with the £10,100 (only 8% of a property’s value) required in Q1 2002.

David Stubbs, RICS senior economist, said: “It takes more capital than ever to set up a buy-to-let investment. 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.”