The Residential Landlords Association has warned that Treasury proposals to make access to buy-to-let lending harder could cut off the supply of new housing.
The RLA believe that plans to hand greater powers to the Bank of England over buy-to-let lending, alongside the recent stamp duty increases on properties of this type, have the potential to restrict investment in the private rented sector.
83% of all new dwellings created between 1996 and 2013 were private homes to rent, according to government figures. And, with PwC forecasting that nearly 60% of young people will be in rented housing by 2025, the RLA says there is a desperate need to expand the sector further as demand continues to soar.
Critics say the government’s recent measures regarding the buy-to-let sector will simply lead to an even greater scarcity of housing, in turn forcing up rents for tenants as demand massively outstrips supply.
The consultation also comes at a time when the Council of Mortgage Lenders has announced that buy-to-let mortgage lending is still much lower than it was between 2006 and 2008.
“There is no clear evidence that the property boom is caused by buy-to-let investors, when rising prices are mainly concentrated in London and the South East,” Alan Ward, Chairman of the RLA, commented. “This is largely fuelled by foreign investors and speculators treating our property as a commodity.”
He went on: “The Residential Landlords Association supports the principle of the Bank of England ensuring that lending does not pose a risk to the stability of the financial sector. It is important that lenders do not saddle landlords with debts which they cannot pay back. But landlord investment is essential to the supply of homes to rent.”
“The overwhelming majority of landlords are responsible borrowers providing homes as a long-term business.”
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