Some interesting stats today about the truth of the debate – do buy-to-let landlords compete with an unfair advantage and are they pricing first-time buyers out of the market?
Figures show that last year first-time buyers (FTB’s) accounted for £46.7 bn of mortgages for purchases, while only £15.6bn of purchase funds were used for buy-to-let investors.
A larger amount of buy-to-let lending (59% of the total) was accounted for by landlords re-mortgaging….which is obviously something all landlords do from time to time to create opportunities for re-investment, or to deal with their loan deals coming to an end – but that has no impact on FTB’s.
Is this important? Of course: Government policy is predicated on the belief that it’s socially unjust to have FTB’s priced out of the market, and also on the Bank of England expressed view that there is dangerous over-heating in house prices fuelled by runaway increases in buy-to-let lending.
Aside from the fact that if buy-to-let landlords do not provide housing, who will (?), these figures show just how naïve is this kind of statement.
John Heron, MD of Paragon, the specialist buy-to-let lender, comments: “A common accusation levelled at buy-to-let landlords is that they have an unfair advantage over home-buyers.
“The data would suggest this is not the case, with buy-to-let purchases making up only 11.6% of all purchases.
“First-time buyers accounted for three times as many transactions as buy-to-let purchasers.”