Buy-to-let “drives out first-time buyers”

Buy-to-let landlords are rushing to invest in the property market but first-time buyers are increasingly being squeezed out by high prices, new research suggests.

The number buy-to-let valuations jumped 33% in the year to May, while first-time buyer valuations fell 4% over the same period, according to latest research from Connells Survey and Valuation.

May’s buy-to-let valuations were up 3% on April, while valuations for first-time buyers fell 2% over the month.

John Bagshaw, corporate services director of Connells Survey & Valuation, said: “Britain’s buy-to-let market is booming right now as would-be landlords are eager to enter the sector and current landlords look to expand."

May was a disappointing month for first-time buyers but that spells yet more good news for landlords, Bagshaw said. "Fewer people looking to buy their first home means more tenants sticking to the rental sector.

“As such, new landlords enter the market and those already in the sector grow their business to capitalise on the increased demand.

“Yet what remains unclear is how long this contrast in fortunes will continue.”

May’s remortgaging figures also outperformed the overall housing market, with valuations up 9% on April’s figures. This equates to a 31% increase on the number of remortgaging valuations since May 2014.

Bagshaw said: “Remortgaging is going from strength to strength right now. Record-low mortgage rates are the main reason for this.”

Across all sections of the housing market, overall valuation activity for all purposes has grown by 3% on a monthly basis, between April and May.

On an annual basis, 13% more valuations were carried out than in May 2014.

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