Value of buy-to-let properties about to top £1 trillion
05-25-2015
In figures: Britain's booming buy-to-let industry is about to pass the £1 trillion mark, accounting for more than 20pc of housing wealth
House prices on a London Monopoly board cost up to £1.4 million on the current property market, experts show.
Investors' fascination with property investment has exploded in the past two decades Photo: PA
By Richard Dyson
The wealth controlled by Britain's growing army of buy-to-let investors is about to pass the £1 trillion (£1,000 billion) mark, according to banking trade body the Council of Mortgage Lenders.
Its latest snapshot of property wealth found that the total value of residential property was £4.8 trillion.
Of that, £1.8 trillion belonged to "home owners" – or, as lenders call them, "owner-occupiers" – while £990bn was in the hands of buy-to-let investors.
In its report the CML said: "The value of the private rented sector was £990 billion in 2014 and, in all likelihood, it will exceed £1,000 billion in 2015."
It pointed out the figure had grown 70pc since the onset of the financial crisis in 2007.
• Watch: 'How I get 35% yields on buy-to-let'
• Mortgage rate rise would make buy-to-let unviable in seven out of ten regions
• Buy-to-let returns beat all other mainstream investments
The vast wealth in buy-to-let is all the more astonishing given that landlord loans only became available in the mid-Nineties. They are now the fastest-growing part of the mortgage market with the biggest lenders including Lloyds Banking Group, Nationwide Building Society and Coventry Building Society.
Even so, the scale of buy-to-let investors' mortgage borrowing relative to their property riches is surprisingly small.
Of the £990bn buy-to-let property universe, property worth £643bn is entirely mortgage-free.
Of the remainder, the average mortgage-to-value is very low, so that in total buy-to-let loans represent just 19pc of the value of their combined property wealth.
– richard.dyson@telegraph.co.uk