Buy-to-let market squeezing first time buyers

20-Jun-2007

The buy-to-let market is rendering the housing market even more unattainable for first time buyers, a leading housing expert has warned.

Speaking at the opening of the Chartered Institute of Housing's (CIH) annual conference and exhibition, Paul Diggory, president of the CIH said that the tax relief being offered to buy-to-let investors is directly restricting first-time buyers.

Figures reveal that around 11 per cent of all new lending in 2006 was in the buy-to-let market – a 57 per cent increase on 2005's figures and totaling a massive £100 billion.

The growth in buy-to-let is pricing would-be novice buyers out of the market, with house prices continuing to soar.

The CIH is calling on the government to remove the tax relief which is available to buy-to-let investors in order to ensure that new affordable housing goes to those who are struggling to get onto the first rung of the housing ladder.

Mr Diggory said: "The government has acknowledged that there is an acute lack of affordable housing across the country so it does not make sense to still offer tax relief to those who buy, simply to rent. Buy-to-let owners have a financial advantage over those trying to buy their first home, as well as pushing house prices even higher."

He called for the new Chancellor of the Exchequer, who will take over from incoming prime minister Gordon Brown this month, to remove the tax relief as part of the Comprehensive Spending Review due in the autumn.

To find out about the different ways of financing a first home, see our section 'Affording Your First Home'.

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