Buy to let could help to boost housing supply

Nia Williams

August 13, 2009

“There is no doubt that housing supply must increase to match population growth, but of pressing concern is the consumer’s ability, or inability, to be able to purchase property if it becomes available. The NAEA continues to highlight the plight of buyers, and first time buyers in particular, who are being denied the necessary finance by the banks. The property ladder has been whipped out from under the feet of those who are ready and able to take advantage of today’s current, competitive prices.

“The only way the NAEA can envisage the population taking advantage of an increase in housing supply is if the private rental sector picks up the slack and helps to meet demand for houses. The Government will end up relying on buy-to-let investors to provide property for rental and ensure that Britain has a roof over its head. But to make this happen, the BTL market needs assistance from the banks and it will only be ministerial pressure that will make that happen. It is time for the Government to make those vast investments in the banks pay by exerting some pressure on lenders to free up the market from the heavy constraints it is labouring under.”

Mr Lilly added “The planning system has not taken into account the way the economy has impacted on the supply of new dwellings. Planning decisions taken by local authorities handicap the supply of new homes. In 2008 the number of new dwellings built was the lowest ever on record, and these planning decisions contribute to the stagnation of the economy.

“The planning policies of high density developments introduced by the Government are not working, and attempts to streamline the planning system have led to an increase in regulations for developers, and so more delays are occurring in these projects. Banks also need to start lending to developers again for such schemes to get off the ground.

“Until the Government and the banks face up to these challenges, the prospects for house building will not improve.”

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