Buy-to-Let Parents Add Fuel to the Property Market

Published 03rd Jul 2007

In a recent survey by a building society group, it was found that 31% of over-55s said they would be interested in property development.

Those parents eager to give their children a helping hand onto the property ladder are thought to be one of the main factors fuelling the buy-to-let boom, according to the report published by Birmingham Midshires. Well-off parents apparently represent around a quarter of those planning to invest in buy-to-let property in the next 6 months - encouraged by the strong property prices and the annual government tax relief (about £2 billion for those investing in property).

This surge of interest comes with the usual warnings however - financial experts say that a new raft of legislation is making life difficult for first time investors. These legislative factors such as stringent fire safety rules, HMO licenses and the new Tenant Deposit Protection scheme can push up the costs of becoming a private landlord.

A spokesperson from a financial advice website stated:
"The buy-to-let sector has only been established as an industry for 10 years and in recent months there has been an increasing drive to impose greater regulation.

"Most of these regulatory changes will cost landlords, so it is important parents are aware of them before they decide to take the plunge."

There has been pressure on the government in recent months to scrap the tax relief for landlords as it is believed by many parties that the buy-to-let sector has led to first time buyers being priced out of the housing market. Last year buy-to-let investors qualified for £2 billion in tax relief - but first time buyers got none. It is expected that this tax relief may even reach the dizzying heights of £3 billion by 2008 - more than the amount the government spends on social housing.

Source: ' Letting News '

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