Are Landlords Really Pricing People Out of Buying Property by Letting Focus?
I was on Radio 4’s Money Box programme on Saturday being interviewed along with Liz Overend of the pressure group Pricedout who call for action to stop people being priced out of the UK housing market.
I have a bit of sympathy with these guys because there is definitely a degree to which first time buyers are priced out by property investors.
I just disagree with them on the extent to which property investors are responsible for this.
The facts say that only approx 10% of English housing stock is in the private rented sector compared to 50% post WW2 and 90% back in the 1920s.
The rented sector in the UK is also very small compared to most other developed countries.
Also, only 10% of mortgages in 2006 were by buy to let investors compared with 28% by first time buyers and buy to let only accounts for 10% of all outstanding mortgages.
At the end of 2006, the percentage of the average first time buyer’s income that went on mortgage interest was only 16.8% which is just slightly above the long run average – stats going back to 1978 are available on the Council of Mortgage Lender’s website .
Alliance and Leicester Rearach Says Lots of People Dont Want to Buy
According to research in 2006 by the Alliance & Leicester one quarter of families either lives with parents or rents - and for over a half of these renting is a lifestyle choice.
In other words, they choose to rent even though they could afford to buy. (Another study by Abbey estimated that 6 million people could afford to buy but did not want the commitment)
So, surely, the real issue is for the government – this one and previous Administrations.
It is they who have presided over a huge fall in social housing stock and a lack of house building, all at the same time as a massive increase in population (caused mainly as a result of massive inward net migration.)
Landlords Contribution
The government knows that property investors have saved their necks by providing the finance for housing – finance which they have so miserably failed to provide – and that’s why they are being urged by their own advisers to tread carefully and not make any fiscal changes or any more legal changes that will only end up driving landlords out.
Having said all that, PricedOut and myself do agree about many things.
As I have said before in this blog, there is much that could be done to improve the rented sector and the tenants’ lot and there is much I find wrong with some property investors activities. I will be writing more about this here in the blog shortly.
ABOUT DAVID LAWRENSON
We are LettingFocus.com - the landlords’ expert and I’m David Lawrenson, the author of “Successful Property Letting” - the UK’s top selling property and buy to let book for the last 3 years.
I have been a landlord and property investor myself for over 25 years. At LettingFocus we offer independent unbiased info for buy to let investors and landlords.
Property investment is largely unregulated and there are many sharks.
Unlike many in the buy to let and property “advice” business I am not linked to a property company, developer, estate agency or bridging loan provider.
As such I am able to give unbiased independent advice on where to buy (which areas), what type of property to buy, when to buy and how to buy property at a low price. I can also explain how to reduce the risk of getting a bad tenant.
CHECK OUT THESE PAGES AT LETTINGFOCUS.COM:
Our Events only take place twice a year.
For our NEXT SEMINAR AND NETWORKING EVENT for Landlords and Property Investors click here:
Next Property Investing Seminar and Networking Event
We have GREAT OFFERS for landlords too, Click here: Services and Products for Landlords to see our Landlords Resources (Useful Links) page. (Selling services to landlords and property investors and have a national coverage? You could be a partner, please get in touch!)
For general info on our SEMINARS AND CONSULTING click here: Property Seminars, Networking Evenings and Consulting
ONE TO ONE CONSULTING click here: Property Consulting
CLIENT TESTIMONIALS from past customers click here: Testimonials
BUY THE BOOK click here: Buy the Book at Amazon
THE HOME PAGE OF THIS BLOG click here: Blog
THE HOME PAGE OF OUR MAIN SITE click here: LettingFocus Home Page
To JOIN our Free QUARTERLY NEWSLETTER simply send an email to david@LettingFocus.com - Please note we WILL NOT send spam or sell our mailing list to advertisers!
IF YOU HAVE A SITE WHY NOT LINK TO THIS BLOG OR OUR WEBSITE?
TO BE KEPT UPDATED WITH OUR LATEST BLOGS look on the right hand side under all the previous blog entries you will find a button which says “Site Feed.” Simply copy the site feed link into your News Reader or News Aggregator.
TO VIEW RELATED POSTS select a “Category” at the bottom of this page.
Need a Guarantor? Find some useful info in this article: ttp://www.lettingfocus.com/pages/myarticles_Guarantorsintenancyagreements.html
Copyright: David Lawrenson 2007. This blog is updated once a week.
I have a bit of sympathy with these guys because there is definitely a degree to which first time buyers are priced out by property investors.
I just disagree with them on the extent to which property investors are responsible for this.
The facts say that only approx 10% of English housing stock is in the private rented sector compared to 50% post WW2 and 90% back in the 1920s.
The rented sector in the UK is also very small compared to most other developed countries.
Also, only 10% of mortgages in 2006 were by buy to let investors compared with 28% by first time buyers and buy to let only accounts for 10% of all outstanding mortgages.
At the end of 2006, the percentage of the average first time buyer’s income that went on mortgage interest was only 16.8% which is just slightly above the long run average – stats going back to 1978 are available on the Council of Mortgage Lender’s website .
Alliance and Leicester Rearach Says Lots of People Dont Want to Buy
According to research in 2006 by the Alliance & Leicester one quarter of families either lives with parents or rents - and for over a half of these renting is a lifestyle choice.
In other words, they choose to rent even though they could afford to buy. (Another study by Abbey estimated that 6 million people could afford to buy but did not want the commitment)
So, surely, the real issue is for the government – this one and previous Administrations.
It is they who have presided over a huge fall in social housing stock and a lack of house building, all at the same time as a massive increase in population (caused mainly as a result of massive inward net migration.)
Landlords Contribution
The government knows that property investors have saved their necks by providing the finance for housing – finance which they have so miserably failed to provide – and that’s why they are being urged by their own advisers to tread carefully and not make any fiscal changes or any more legal changes that will only end up driving landlords out.
Having said all that, PricedOut and myself do agree about many things.
As I have said before in this blog, there is much that could be done to improve the rented sector and the tenants’ lot and there is much I find wrong with some property investors activities. I will be writing more about this here in the blog shortly.
ABOUT DAVID LAWRENSON
We are LettingFocus.com - the landlords’ expert and I’m David Lawrenson, the author of “Successful Property Letting” - the UK’s top selling property and buy to let book for the last 3 years.
I have been a landlord and property investor myself for over 25 years. At LettingFocus we offer independent unbiased info for buy to let investors and landlords.
Property investment is largely unregulated and there are many sharks.
Unlike many in the buy to let and property “advice” business I am not linked to a property company, developer, estate agency or bridging loan provider.
As such I am able to give unbiased independent advice on where to buy (which areas), what type of property to buy, when to buy and how to buy property at a low price. I can also explain how to reduce the risk of getting a bad tenant.
CHECK OUT THESE PAGES AT LETTINGFOCUS.COM:
Our Events only take place twice a year.
For our NEXT SEMINAR AND NETWORKING EVENT for Landlords and Property Investors click here:
Next Property Investing Seminar and Networking Event
We have GREAT OFFERS for landlords too, Click here: Services and Products for Landlords to see our Landlords Resources (Useful Links) page. (Selling services to landlords and property investors and have a national coverage? You could be a partner, please get in touch!)
For general info on our SEMINARS AND CONSULTING click here: Property Seminars, Networking Evenings and Consulting
ONE TO ONE CONSULTING click here: Property Consulting
CLIENT TESTIMONIALS from past customers click here: Testimonials
BUY THE BOOK click here: Buy the Book at Amazon
THE HOME PAGE OF THIS BLOG click here: Blog
THE HOME PAGE OF OUR MAIN SITE click here: LettingFocus Home Page
To JOIN our Free QUARTERLY NEWSLETTER simply send an email to david@LettingFocus.com - Please note we WILL NOT send spam or sell our mailing list to advertisers!
IF YOU HAVE A SITE WHY NOT LINK TO THIS BLOG OR OUR WEBSITE?
TO BE KEPT UPDATED WITH OUR LATEST BLOGS look on the right hand side under all the previous blog entries you will find a button which says “Site Feed.” Simply copy the site feed link into your News Reader or News Aggregator.
TO VIEW RELATED POSTS select a “Category” at the bottom of this page.
Need a Guarantor? Find some useful info in this article: ttp://www.lettingfocus.com/pages/myarticles_Guarantorsintenancyagreements.html
Copyright: David Lawrenson 2007. This blog is updated once a week.
Labels: house prices and landlords, Landlord bashing, PricedOut, property prices, social housing
This entry was posted by lettingfocus, on
Monday, September 24, 2007.
