Better news for landlords:

UK house prices are set to soar over the next 30 years while the average income won't keep pace, putting home ownership out of reach of millions.

Professor David Miles, a former member of the Bank of England's monetary policy committee, says the shortage of housing and a restriction on the availability of land in the UK will mean house prices keep spiralling upwards for decades to come. Speaking at an event in Westminster this week, Miles revealed analysis showing that “extraordinary” house price inflation over the past 30 years was likely to continue for the next 30 years. Worse, he warned that median salaries in the UK were unlikely to keep pace with rocketing house prices, putting home ownership even further out of reach for aspiring buyers.

UK house prices have not just gone up relative to the price of things we buy but also relative to incomes. Whichever way you cut it, it's been an extraordinary period of rising house prices.

Buy-to-lets still strong:

Average buy-to-let loans and deposits increased in 2016, new research has revealed.

This came as a result of soaring property prices and the tougher stance taken by lenders on criteria and rental calculations.

The findings reveal that landlords borrowed an average of £15,000 more to buy property in 2016, in comparison to 2015. The average loan rose in 2016 to £185,188, up from £170,268 a year before.

Meanwhile, the average loan to value fell from 61.6% in 2015 to 59.7% in 2016, while the average deposit climbed by 18% to stand at £125,016 in 2016. What’s more, landlords and investors paid out more for their properties year on year – 12.7% more, in fact. The average property price in the South of the country last year was £310,265, up from £275,286 in 2015.

Buy-to-let Interest rates could go either way

Bank of England governor Mark Carney has suggested an interest rate hike is more likely this year if wage growth outstrips expectations.

Speaking to the press after the launch of the Bank’s inflation report and monetary policy update, Carney said the Bank has assessed the resilience of the UK economy after the latest interest rates cut and saw that the economy could cope with interest rates being held at record lows.

He says: “We can see scenarios in either directions [rates hike or cut]. We have made some important assessments in this forecast on the excess capacity in the economy.

But he adds if wages grow faster than expected then a rate rise might be needed, though he cautioned his remarks were “not a signal”.

Lending increases

Buy-to-let lending saw its highest monthly increases in November and December since stamp duty changes were introduced last April.

Landlord borrowing was up 10% for the two months, although this figure was 7.4% down on the previous year. Over two-thirds of buy-to-let loans were re-mortgages rather than house purchases. Buy-to-let lending, driven by re-mortgage activity, saw its strongest monthly lending level since the stamp duty changes on second properties introduced last April.

It’s expect buy-to-let lending levels in 2017 will be slightly lower than their 2016 as further tax changes take effect. Monthly lending to first-time buyers surprisingly rose by 4% in December last year and the trend is continuing into 2017.

Forecasts for 2017 may be less bullish than a year ago, as economic uncertainty weighs on the market, but experts are predicting a steady stable year.