Buy to let time bomb

Research from price comparison website moneysupermarket.com shows five per cent more people are renting properties now than in October last year. However, in the past month alone there has been a 40 per cent drop in the number of buy to let mortgage products available, revealing Britain might be on the road to a housing disaster.

Up to five per cent of Brits have been forced off the property ladder since October last year. Lenders' demands for ever increasing deposits, tightening of credit criteria, higher product prices and general uncertainty over market conditions make owning a home a luxury simply out of reach of an increasing number of people.

More than one in 10 (11 per cent) people said they had planned to get a mortgage but could no longer afford to or were put off by higher deposits, and a third said they just can't afford to buy now. Renting is starting to look like the last best hope as people ride out the effects of the credit crunch.

Louise Cuming, head of mortgages at moneysupermarket.com, said: "You would imagine this would mean the buy to let market would start to grow. However, our research shows the number of buy to let products has decreased from 4025 to 674 in just one year, with nearly 600 of these products removed since March 31st.

"As stringent lending pushes people into the buy to let market, the decrease in the number of buy to let mortgages becomes increasingly alarming. I fear we will soon see many people unable to buy or rent - the question is, where do they go from there?"