Buy-to-let harming first-time buyer chances
February 10, 2007 by admin
Filed under News, News-Mortgages
First-time buyers are losing out due to the growing buy-to-let market, according to Firstrung, a mortgage company specialising in first-time buyer deals.
In their estimation, up to one million properties have been lost to the first-time buyer market because of buy-to-let purchasers, and the competition between the markets has resulted in £50,000 price rises over the last four years.
Firstrung released their statement in response to a comment by Professor Michael Ball of the University of Reading at a conference held by the Association of Residential Letting Agents (Arla).
In his speech to the Arla annual conference on February 7th, Professor Ball “dismissed” the idea that buy-to-let investors force first-time buyers out of the market, and said: “Buy-to-let has increased the size of the private rented sector and extended the alternatives to both owner-occupation and social housing.
“It has assisted in the regeneration of inner city neighbourhoods and in some areas it has helped to revive the housing market.”
Responding to the comments, Paul Holmes, operations director of Firstrung issued some stinging criticism.
“In recent years amateur buy-to-let investors have had a more detrimental effect on first-time buyer opportunities than any other purchaser,” he said.
“First-time buyers would be looking at average prices circa £100,000 to get on the first-rung, as opposed to the average entry level price of £150,000, if buy-to-let had not taken such a grip of the imagination of the British public.”
