Buy-to-let buyers not causing price rises
February 7, 2007 by admin
Filed under News, News-Mortgages
A leading property expert says the popular belief that buy-to-let investors are pricing first-time buyers out of the housing market is unfounded.
Michael Ball, professor of urban and property economics at the University of Reading Business School, said investors are not to blame.
He was speaking at the annual conference of the Association of Residential Letting Agents (Arla) and said that there is only one way in which to bring house prices down to a more attainable level.
“It is to build more houses that people actually want to live in and in places where they want to live,” he told the conference.
Mr Ball was keen to emphasise that he feels those considering getting a buy-to-let mortgage are benefiting the market, and society as a whole, and should be encouraged to go through with their plans.
“Without buy-to-let, the private rented sector would probably be much smaller. The quitters would have exceeded new entrants,” he said.
“It enables households to build up their own equity and, although tenants do not share in capital gains directly, they do so through lower rents and lower risk.
“They can do this while living in good standard accommodation, as competition in the rental market is now greater,” added the professor.
Buy-to-let properties account for between five and six per cent of housing in the UK and is a bigger industry than all of the country’s pubs, hotels and restaurants combined.
