On Mortgage Strategy Online last week was the story that two-thirds of first-time buyers have given up the dream of owning their home.
But why is everyone continuing to pussyfoot around the core issue? The answer is that house prices need to fall further to put them within reach of most first-time buyers.
Over-generous lending in the run-up to the crash inflated a bubble in house prices that has still not deflated. Until we get house prices on a sensible level this sort of nonsense will continue.
Buy-to-let is a huge part of first-time buyers’ problems as they compete with investors for the same properties.
Of course the government is so keen on home ownership that it gives buy-to-let investors full tax relief on their interest payments.
Buy-to-let should only be possible where investors get together to build developments for rent and existing property should be ring-fenced for first-time buyers.
The Bank of England should be prepared to allow house prices to reach their true level. This will start happening as soon as interest rates return to normal levels.
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