Buy-to-let pushing first-time buyers out?
Published On 12 October 2007
The number of first-time buyers in the UK is falling, according to new figures, suggesting that the first rung of the property ladder is becoming more difficult to reach.Research carried out by Moneysupermarket found that the proportion of people classed as first-time buyers has dropped by 20 per cent since March of this year.
The price comparison site said that the drop indicates that five interest rate rises since August 2006 and a shortage of suitable properties were taking their toll.
It said this lack of 'starter' properties was in all likelihood due to increasing numbers of buy-to-let landlords, who have apparently thrived over the last year. Recent Council of Mortgage Lenders' figures revealed that lending to buy-to-let buyers grew 37 per cent in the 12 months to August this year.
But Simon Gordon, head of public affairs for the National Landlords Association, said that saying this sector of the market is to blame for the difficulties faced by new buyers "is too sweeping a statement".
He added that what may be true of one region is not of another, explaining that the UK should not be treated as one market.
Regardless of the reasons first-time buyers are failing to enter the housing market, their decline could have implications for the whole property ladder.
Louise Cuming from Moneysupermarket said: "First-time buyers are the lifeblood of the housing market and provide essential liquidity, so the fact this segment is getting smaller is worrying for the economy as a whole."
