Here is Property Options’ latest update on the UK Buy To Let (BTL) market – for August 2018.
This update is by economist Chris Worthington, who is one of our regular PIM speakers.
This month we decided to review local and national government policies on housing and the buy to let (BTL) market. In doing the research for this article it soon became apparent that there is a wide range of conflicting views especially around planning policy, housing supply and market driven solutions compared with public sector investment in housing.
Here is a summary:
- The government has published a new National Planning Policy Framework setting out guidelines for building better designed homes, at a faster rate, in the right places and with provision for infrastructure and affordable housing.
Commenting on the Policy Framework Lord Porter, chair of the Local Government Association said ” planning is not a barrier to house building and councils are approving 9 out of 10 planning applications. To boost the supply of homes and affordability it is vital to give councils powers to ensure homes with permission are built, enable all councils to borrow to build, keep 100% of right to buy receipts and set discounts locally.”
- A report from the Adam Smith Foundation takes the opposite view – stating that “the current housing crisis in the UK is a failure of politics not markets and is the result of restrictive planning laws. Radical reform is needed to mend it.”
- The Residential Landlords Association propose that the 3% levy on stamp duty on second homes should not apply where the property increases the overall supply of housing, such as converting empty office and shops.
- A recent report from the Resolution Foundation found that if home ownership follows the same trend into the 2020s, up to half of millennials could be renting privately or in the social rented sector in their 40s and a third could be renting by the time they claim their pension.
They propose the introduction of indeterminate tenancies as the sole form of contract following Scotland’s lead and the practice in Germany and some other European countries.
- Onward, a centre right think tank, has proposed that council’s should impose limits on non UK buyers of property where there is significant under supply. Onward also propose that mortgage interest tax relief for BTL should be scrapped altogether thereby improving the supply of homes for owner occupiers.
There is no doubt about the importance of the private rented sector (PRS) in the housing market. Demand for rented homes is set to continue rising, with the sector likely to reach six million by 2025.
In the midst of the confusion and disagreement on the part of policy makers, think tanks and commentators on the housing market, the PRS at least offers an efficient market to supply accommodation that for the most part is of a good standard and is meeting the needs of tenants
Find Out More
We will be delving into these issues and more at our next PIM on Thursday 27 September 2018 at Future Inn, Bristol City Centre, 6-9 pm.
We hope you will join us then.
For more info and to reserve your place Click Below