Tue, 05 Jan 21
A philanthropist claims the difficulty some younger people have in getting on the property ownership ladder is caused by Baby Boomers who have bought buy to lets.
James Drake, who has contributed to and founded sports science and music organisations in the UK, has written on his website that many wealthier buyers from the Baby Boomer generation - in their 50s and older - have substantial wealth including, often, more than one property.
“Property is one of the few ways investors can access cheap leverage on their investments via buy to let mortgages. While you couldn’t secure a £300,000 loan from a bank to invest in stocks and shares, securing a loan for 75 per cent of an investment property’s value is comparably achievable” he writes.
And he adds: “Buying property with borrowed money and reinvesting the profits is a well-established fast-track to building wealth, but this can have a devastating impact on younger generations looking to close deals on affordable properties.”
Drake’s article also includes a claim that private renters’ rights are less powerful in this country than in many others.
“European countries with a larger proportion of renters than the UK have more rights and security in place for tenants, making rented accommodation more appealing. Not only do these rights attract tenants and therefore reduce demand for affordable homes on the property market, but the wider acceptance for renting also dissolves the social stigma associated with life-long renting that is all too prevalent in the UK” he claims.
And he suggests that UK tenants pay almost double the European average in rent, even compared to countries that share similar wage levels.
“Instead of questioning why tenants aren’t making their way onto the property ladder, we should be questioning the validity of the negative associations with renting” he concludes.
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