If you believe this story, investing in a buy-to-let property seems the obvious answer. But, ironically, it has never been harder for wannabe landlords to enter the market. The number of buy-to-let mortgage products has plummeted by 94 per cent since the market's 2007 peak, according to consumer advice website Moneyfacts.co.uk. Perceived as higher risk by mortgage lenders, a deposit of 40 per cent is now required to secure the best rates, and some arrangement fees are an eye-watering 3.5 per cent of the loan amount.
And even if you're a cash buyer, you will still struggle to find a bargain. Residential auction salerooms are packed to the rafters with sophisticated investors, driving up prices in their determination to access income yield from property. At the Allsop sale last week, there were gasps when one London property went for nearly double its guide price.
This week, property consultancy Savills predicted that the average UK house price will rise by 27 per cent over the period 2012 to 2015. This would leave the average UK house price just under £200,000 (that’s over 7.5 per cent higher than at the peak of the market in 2007).
Private investors may well despair at the high barriers to entry. There is also mounting frustration among existing landlords, who want to expand their portfolios but find they are stymied by high finance costs. So it's hardly surprising that a welter of unregulated private funds have suddenly appeared to satisfy the UK's insatiable appetite for residential property.
