Could mortgage cap boost flats to rent in London?
Hi there,
The UK central bank’s decision to cap mortgage lending could boost the cost of renting in London as end users are pushed out of the market in favor of cash buyers.
Many people are choosing to rent as the supply of housing to buy has fallen making it harder for them to find their dream home. Shortage of choice as far as getting the right home goes; some are having difficulty securing a mortgage to suit them, as lending has markedly decreased in recent times. Many are opting to bide their time and simply rent property in London in the interim.
It may be that property to rent in London or around the UK becomes more popular after one expert indicated that putting a cap on mortgage lending would freeze the housing market for years. Hannah-Mercedes Skenfield of Moneysupermarket.com told the Guardian that imposing such restrictions would be “disastrous” for the home loans market. She said: “For many young people looking to get a foot on the first rung of the housing ladder, a deposit of perhaps £25,000 is unthinkable.” Ray Boulger, senior technical manager at home loans broker John Charcol, claimed that giving power to the Bank of England would be unnecessary given the amount of control already exercised on the sector to date. Comments that a cap on mortgage lending could be detrimental to the housing market might encourage more people to look for property to rent in the London borough of Croydon or elsewhere in the country.
