Jun

Is the policy of moving the housing market in favour of first time buyers failing?

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Successive governments have said they want to see fewer landlords and more first-time-buyers, using taxes and legislation to achieve their aims. But today’s lending figures show this may not be working.

The latest UK mortgage lending figures show heavy
taxes and red tape have failed to curb buy-to-let growth, much to the likely
annoyance of ministers.

Trade organisation UK Finance’s mortgage
lending analysis for the first quarter of 2020 shows buy-to-let (BTL) lending
up 7%, while lending to first time buyers continues to decline – despite the government’s
expensive Help to Buy scheme.

Its drive to reduce the private rental market
and free up stock for first-time buyers looks to be stalling, as the report
states: “While we had seen purchases within the BTL sector improve considerably
over the past year, following a decline due to tax and regulatory changes that
started in 2016, we had seen material growth in this sector from December 2019
onwards.

“This recent growth in BTL purchase has helped to offset first-time buyer numbers, which have been declining slightly since October 2019.”

Buy-to-let market

John Goodall, CEO at Landbay, says his
company saw an even greater increase in the buy-to-let market.

“While the Coronavirus lockdown from
mid-March has hampered this, there is still a notable demand from landlords and
investors. The figures showed a drop in first-time buyers even before Covid-19
hit and following the pandemic it’s highly likely that people will be renting
for much longer, so the need for private buy-to-let will be greater than ever.”

However, the
National Residential Landlords Association warns that one set of figures
shouldn’t be taken out of the longer term context.

Deputy policy director John Stewart says: “According to the
Government’s data between March 2018 and 2019, the number of private rented
homes in England fell by 49,000.

“We need to end the approach of picking winners and losers in the housing market. The Government needs to develop pro-growth policies to boost the supply of homes in the owner occupied, private rented and social rented sectors.”

Use our buy-to-let jargon buster.

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