Due to the economic recession, it has been recorded that the Brits have lost their confidence in the Buy-to-let property market.

Results showed that only 1 in 10 Brits still believe and have confidence in the buy-to-let industry; while nearly a third (28%) of the research participants have lost their confidence in the market - foreseeing the buy-to-let market as a buy-to-lose activity when investing or involving in it under the economic climate. Further 23% of them assume that getting into the market would only just break even without any loss or profits.

The enduring economic recession has a huge impact on the confidence of the British on the private letting sector. It has been revealed that more and more people are holding a pessimistic view within the market. This even starts to divert the views between the younger and the older generations, which both group are holding contradictory ideas on the buy-to-let market at present.

1. Age group of 55s

10% of people in this age group are holding a negative vision on the current buy-to-let market - where they will expect to lose a lot when investing in buy-to-let properties.

2. Age group of 18-34s

On the other hand, 10% of Brits in this active and financial-independent age group believe now is the good opportunity with the right time to make “big money” within the private renting market.

Analysis on the phenomenon

People who are on the side of the older generation are probably focusing on the fall in values of equity as well as decrease in buy-to-let mortgage approvals of the buy-to-let properties.

The buy-to-let mortgage deposit has jumped from 15% at the beginning of last year to 25% now. Besides, it is recorded that 22,400 new buy-to-let mortgages were taken out in the first three months this year - which lead to a total estimation of 89,600 mortgages take out within this year. Comparing this estimated figure to 346,000 of buy-to-let mortgages being taken out two years ago, the buy-to-let market is no doubt being hit hard. Hence, it is not surprising for the older generation to believe that investing in the buy-to-let market would generate a loss.

On the other hand, since the house prices have fallen sharply, it is likely to make a “profit” when it appreciates in value of the property. With this reason, the younger and independent generation of 18-34s believes it is now the best opportunity to invest in the buy-to-let sector.

Having polarised views and advice on the buy-to-let market, investors now have to decide which side should be taken into account for references.

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