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Assault on buy-to-let fails to increase owner-occupier purchases

Property Technology Blog

Housing crisis shows no sign of easing

Britain’s housing crisis shows no signs of easing this year, as we reach the end of the first quarter, despite increasing media attention and government intervention. Data from the Land Registry shows that house prices jumped by 6.4% last year, which led to a sharp fall in completed transactions, as all but the wealthiest find themselves priced out of the market. The government’s hefty assault on buy-to-let landlords has failed to decrease rental demand or increase the numbers of owner-occupied property because property is simply too expensive in the UK. And now, a new report by PwC goes further, predicting that the numbers of people renting in the UK by 2025 will increase dramatically in every region across the country.

London to see sharpest price increase

As ever, in the property game, Londoners will be hardest hit – PwC’s report forecasts a 24.4% rise in the number of people private renting in the capital between 2000 and 2025, with a sharp increase of 14.5% across the UK as a whole. London is set to become a city of tenants, with only 40% owning their own home in 2025, compared to 60% of homeowners in 2000.
PwC’s report will strike a blow to the heart of the government’s schemes to widen home ownership, particularly in the 20-29 demographic. Despite the roll out of “Help to Buy”, the retraction of landlord tax breaks and George Osborne’s move to increase stamp duty on buy-to-let properties from April, the seismic shift from generation rent to a nation of homeowners that the government is aiming for just hasn’t happened.
Government data released in January showed that rent paid to private landlords actually grew by 2.5% last year, with that increase 3.9% in London.
Chief executive of homeless charity, Shelter, Campbell Robb told the Daily Telegraph:

“With house prices rising rapidly every year, it’s no wonder that so many people are losing hope of ever being able to get a foot on the housing ladder.

“Sadly, current government schemes, like so-called “affordable” starter homes costing up to £450k, will continue to leave people on typical incomes stuck in expensive and unstable private renting, and unable to save for the future.

“There’s been a lot of talk about how to solve the housing shortage, but what this country desperately needs is a commitment by the Government to invest in building genuine homes that people on ordinary incomes can actually afford to rent or buy.”
Until then, despite their livelihoods being eroded, private landlords will have to fill the gap – until it becomes untenable to do so.
Zahraa Valu

Written by Zahraa Valu

Buy to Let | Repairs and Maintenance Software

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