Buy-to-let investors and private buyers are not competing for the same properties, a study has claimed.
The research, which was carried out by the Sunday Times and a prominent estate agency, claims that just one in three properties eventually sold to investors last year received any sort of offer from a private buyers wishing to buy the property to live in as their main residence.
This research seems to be at odds with a widely held belief that it is buy-to-let investors who are responsible for rapidly rising property prices, preventing many would-be first time buyers from securing a place on the property ladder.
The government has made no secret of their desire to ‘dampen’ the buy-to-let market in order to make more property available to private buyers wishing to buy residential property in which to live.
Recent steps aiming to do this include changes to landlord tax relief and a three per cent stamp duty hike for buy-to-let investors and others purchasing multiple properties, which have not been popular with property investors. If the new research is accurate it seems these measures will not have the desired effect and may have little impact on property prices or property availability.
Danny Luke, Managing Director at Quick Move Now – the UK’s largest independent home buyer, commented:
The media has been quite scathing about buy-to-let investors in recent months, and the government has been very vocal about the role it believes property investors play in increasing house prices and low supply of availably property, but what all this rhetoric fails to acknowledge is the vital role buy-to-let investors play in the provision of housing in the UK, both in terms of private rental and providing housing for use by local authorities, who have a huge shortage of council properties available.
Measures such as stamp duty hikes and tax relief changes are being introduced in an attempt to mute the buy-to-let market, but punishing property investors is unlikely to reignite the property market in the way it is hoped.
The real issue with the property market is a shortage in property supply, both in the purchase and rental sectors. If we continue to take steps to squeeze the buy-to-let market, my fear is that investors will be pushed out of the market and we will be left with an even greater shortage of rental property that will further compound our current housing crisis.
A significant proportion of the population rely on the private rental sector and we should be very cautious of pushing buy-to-let investors out of the market.