Live and let buy
Some MPs and local authorities are calling for controls on what they see as the damaging buy-to-let market. However, the mortgage industry has hit back hard to counter this stance.
The recent call by MPs for more controls on buy-to-let, claiming that it is ‘distorting’ the property market, forcing up prices and crowding out local buyers, caused something of a flutter in the mortgage and property market.
The all party Housing Select Committee’s report on '
Affordability and the Supply of Housing' (420KB pdf), urges government to give local authorities more powers to limit the amount of buy-to-let properties in certain areas.
The report stated: ‘In some areas the housing market is distorted by significant levels of buy-to-let investments, which have driven up prices and not created stable communities. In these areas, the fact that housing offers a higher return on capital investment than equities has driven up prices artificially and is making home purchase unaffordable for local buyers, forcing them into rented accommodation.’
The Welsh Street Homes Group in Liverpool, one of many local authorities to give evidence to the Committee, warned that, ‘the increased borrowing power available to Southern, or Irish property owners has enabled the purchase of buy-to-let property in Northern cities. This has affected supply, and the cost of buying and renting accommodation in Liverpool.’
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