Speaking at Sesame’s London conference today Matthew Wyles, group distribution director at Nationwide, said: “Quite unfairly some commentators have blamed first-time buyers’ inability to buy on buy-to-let investors. I think that’s just utter, unadulterated baloney.”
Wyles claimed the evidence for this was that property prices are not rising yet rental values are.
He said this “clearly indicates that there is a demand for rental property that is outstripping the demand for owner occupation”.
He added: “It’s a complex algorithm but the reluctance of people to get into the market, issues around criteria and the amount of equity people have to put down is maybe holding them back.
“Most buy-to-let investors are pretty rational. They’re looking for yield and a fair return on their money. If you take all the fundamentals we’ve agreed aren’t going to change why would the expansion of the buy-to-let market slow down? I can’t see it.
“I think that residential investment as a market is set to grow as a permanent feature from here on in and it’s an opportunity for all of us.”
Mike Jones, director of intermediaries at Lloyds Banking Group, said Wyles was “spot on”.
“We don’t see the two crowding each other out. I can’t remember a time when I was young when people weren’t telling me I needed to be in property but now those same people in the same pubs are saying best not commit yourself just yet. The mood of the country has changed.”
And David Finlay, intermediary channel director at Barclays, added: “Buy-to-let and first-time buyers are two separate markets. But there is also the social factor at play with people today moving around the UK more particularly when they’re young.
“They are making a rational choice not to purchase as early as they have in the past and they will rent instead.”
Meanwhile Jones said LBG is forecasting “healthy growth in buy-to-let” next year.
“We see that market getting 20% bigger next year partly from incumbents and partly from new people pushing more capacity into the market,” he added.
Finlay was also bullish about the buy-to-let sector’s prospects in 2012 and confirmed Barclays’ lending this year has so far been “fantastic”.
He added: “We’re in the buy-to-let market to do a lot more lending and I want to do four times as much next year.”
