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This Week’s Dilemma

The buy-to-let sector is growing at an unprecedented rate and reports indicate that landlords and residential purchasers are often competing for properties. With first-time buyers increastingly finding property too expensive, are we unwittingly forcing people to rent because they can no longer afford to buy? Could all this collapse around our ears when the buy-to-let sector eventually implodes?

It’s true that buy-to-let lending is growing at an unprecedented pace but this is because the sector is meeting a growing consumer need.

Much of the rental sector is still controlled by professional organisations rather than individual private landlords who have recently joined the market, so this factor is not as important as one may first think.

While it must be acknowledged that the increase in the buy-to-let market is a factor in rising house prices, one of the primary problems is that not enough affordable homes are being built.

So the problem is not just affordablity but availability. Even if people could afford to buy, are there the properties for them to buy? If more new properties were built that were affordable for more people it would follow, by the basic law of supply and demand, that availability and prices would be kept in balance.

There is a need for change in housing policy and this must include building programmes being instituted to solve the problem of the lack of affordable housing.

The government must also examine planning processes including its policy on green belt development, as well as expanding shared ownership schemes and other initiatives to help aspiring first-time buyers. Without this commitment, focus and drive the problem will continue to go from bad to worse.

Gary Webster is head of sales and business development at UCB Home Loans

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