Will all the buy-to-let changes free up more properties for first-time buyers or will the chancellor be forced to step in?
Landlords have some homework to do.
Even if they have accepted the increased stamp duty charges and the changes to tax relief, they now need to consider the recent Prudential Regulation Authority report.
The constant changes to buy-to-let have made it more challenging and not a market for the faint-hearted. But it will be interesting to see if all of this increases the availability of homes for first-time buyers.
According to a recent report from the London School of Economics, house prices and sales volumes fell across the UK during the slump of 2008/09. This, together with the fall in availability of mortgages with a small deposit, resulted in thousands being excluded from the housing market.
With the demand for rental property at an all-time high and the buy-to-let market more difficult to operate in, older and wealthier homeowners seized the opportunity to move without selling their existing property. This meant they bought at a low price and could wait for their existing property to increase in value while receiving rental income from it.
These ‘accidental landlords’ share more blame for the difficulty first-time buyers have had in getting on the property ladder than do those specifically intent on letting property.
That said, the number of first-time buyers increased by 10 per cent in the first six months of this year. According to Halifax, a lot of older homeowners are also helping first-timers by providing a whopping £5bn to children seeking their first home.
All in all it is a heady brew and one that is tricky, I suspect, for the chancellor to figure out in terms of what steps to take in his first Autumn Statement next month.
Sally Laker is managing director at Mortgage Intelligence