Some of the Con-Dem Government flagship schemes to get the UK housing market moving again such as Funding for Lending (FLS), NewBuy and FirstBuy have been targeted by a succession of property professionals at a buy-to-let event in Westminster, last week.
John Heron, managing director of specialist mortgage lender Paragon said: “Politicians are tinkering around at the edges and seeking headlines. They are being schizophrenic. On the one hand, they are doing everything they can to drive lenders away from high-risk lending, On the other hand, they are coming up with initiatives encouraging 95% mortgages on new-builds to first-time buyers.”
At the inaugural “Great Buy to Let Debate”, organised by the Wriglesworth consultancy, both he and other speakers called for a root and branch review of all government policies.
Richard Lambert, chief executive of the National Landlords Association (NLA), said: “Such a review should go beyond politics and form a much bigger national debate as to what we want of housing over the next 20 years. We are at the start of what looks like a major movement in the way the UK houses itself. It is not inconceivable that 40% of the population would never be able to afford to enter home ownership from their own resources”.
Some of the speakers suggested that the majority of people were turning to living in the UK private rented sector (PRS) housing because they preferred the flexibility of the lifestyle offered by not being tied into owning the property.
However, Professor Michael Ball poured scorn on this idea stating that “it is basic economics that people want to buy their own properties where they could, in order to take advantage of any rise in the equity of the property. One reason why people haven’t been so keen to buy in the last five years is because they could see that UK house prices were going down”.
Elsewhere in the debate, speakers acknowledged that buy-to-let mortgage rates are much higher than for residential mortgages, despite a lower risk.
Mr Heron said that the risk was “demonstrably lower’ than for the rest of the market, but said that buy-to-let cases were a commercial proposition, requiring “a costly and extensive underwriting process”.
Original Article: Estate Agent Today
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