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Buy to Let

‘Tension’ between landlords and first-time buyers

Adam Williams
Written By:
Adam Williams
Posted:
Updated:
05/08/2015

There is an increasing ‘tension’ between differing parts of the housing market, with government changes not helping the situation, a letting agent has claimed.

In the Budget in July Chancellor George Osborne made changes to the buy-to-let market. This included lowering the amount of tax relief on offer to landlords and allowing only actual wear and tear to be offset against tax.

Valerie Bannister, lettings director at Your Move, said that there is ‘tension’ in the marketplace and the Chancellor’s changes would only exasperate the situation.

“There is an inherent tension in the property market between landlords and first-time buyers – but that’s common of all marketplaces, and to try and manufacture it will only distort natural market factors,” she told Your Mortgage.

She claimed the first-time buyer market was currently ‘favourable’ but said rising rents would restrict their ability to buy in the long-term.

“First-time buyers have clearly been thrown a lot of lifelines recently, in various guises of Help to Buy and the ISA scheme, and all-in-all are facing some of the most favourable conditions ever, with cheap borrowing available,” Bannister added.

“But to get to that crucial stage, people need to be able to save in their years of renting beforehand, and that only gets harder if rents rises. In this way, affordable rental properties help people climb onto the ladder – so skewing against them doesn’t make much sense.

“It’s a curious move that while he takes with one hand, the Chancellor is giving to accidental landlords in the other, and encouraging the ‘Airbnb’ generation of sharers to rent out spare rooms via greater tax relief.  He would be better placed supporting the regulated side of the private rented sector – protecting tenants from inexperienced and opportunistic landlords.”