As property markets boomed, more investors saw opportunities in buy to let mortgages, which are specifically designed to provide investors with the ability to purchase property. Instead of qualifying buyers by their income, these mortgages are based on the potential rental income of the property.
A study that was done and released on Wednesday reports that the average home price had risen 150 per cent in real terms since the 1990's. The study, done by National Housing and Planning Advice, showed that first time home buyers were charged, on average, about £90 more per month than a typical home buyer.
In England, it is estimated that some 2.5 million homes are owned by private landlords, many of which use a buy to let mortgage to secure the properties there.
A key factor to note is that may how rent these properties do not qualify to purchase properties of their home, positioning a large number of people in a precarious position should these property owners default on their loans.
Additionally, the impact of these buy to let mortgages has been successful in raising the overall value of properties here. If this property boom had not happened in this fashion many believe that the average house price would be £169,000 instead of the current £183,000.
