In its report Affordability and the Supply of Housing, the increasing promiscuity of BTL is inflating prices to push out the local population and creating unstable communities, especially in the North of the country.
The report stated: ‘The BTL market is attracting additional investment and new opportunities for private renting in many town and city centres. In some areas, however, the transient population living in the private rented housing adds to the instability of the area; the activities of investment funds can skew, albeit temporarily, any indicators of affordability as the house prices reflect the expected financial return rather than what the local population can afford. The local population is thus excluded from homeownership.”
While accepting there had been problems in some areas, Mark Sismey-Durrant, chief executive of Heritable Bank, defended the BTL market.
“In a time of rising house prices, people need to rent and the demand is very high. There are little pockets of streets which have been brought by investors which have caused resentment, but market forces are dictating prices and demand will dictate what people can afford.”
Despite its comments on the BTL market, the report also said the government’s emphasis on homeownership was damaging the rental sector and people that rent should be protected.
A spokesperson for Mortgage Express said while the government was not anti-BTL, some of its comments seemed contradictory.
“The quality of rental accommodation has gone up significantly and there are always people who can’t afford to get onto the property ladder who need to rent. The BTL market is servicing a need and competition between landlords means people are getting good quality. The quality of rental accommodation has increased since the advent of BTL 10 years ago.”
