Cost of mortgages set to pinch
Analysis from the Centre for Economics and Business Research seen by The Sunday Times predicts that average annual cost of a mortgage will increase by 34% to £10,926 by 2020.
This figure is twice as fast as the expected 17% growth in disposable income for households in the same period.
And Christopher Evans, of the CEBR, told The Sunday Times that this increase could be a big boost to the buy-to-let sector.
Evans said: “The increased difficulties and costs of gaining mortgage benefit landlords.
“As they become less affordable, more people considering owning a house will be pushed into renting – and some existing home-owners will find it more viable to sell their houses and rent.”
The Intermediary Mortgage Lenders Association (IMLA) expects more than half of Britain‘s homes to be rented by 2032.
Last week, the Royal Institution of Chartered Surveyors (Rics) revealed its expectations for annual gross yields. Rics predicted annual gross yields to be up 5.19% this year up from its previous prediction of 5.16%.
And figures from estate agent Savills, set to be published tomorrow, showed that rent has increased 2.9% in prime central London in the past year.