New terms of reference for buy-to-let

A new Housing Intelligence report published by Hometrack, the property website, has gone some way to remove recent negative association with the term buy-to-let.

In the report, Hometrack’s director of research, Richard Donnell, argues that concern over the impact on property prices of buy-to-let investors should be put to one side to allow a proper debate about the role of the private rented sector in balancing housing supply and reducing affordability problems.

Whilst affordable housing may go some way to offering solutions, the importance of the private rented sector is sometimes overlooked.

According to Hometrack, 70% of private rental tenants are unable to access owner occupation.

As a result, there will be a need for an additional 600,000 privately rented homes by 2021, which in terms of new investment amounts to around £100 billion.

Despite the recent growth in the buy-to-let sector, privately rented homes account for only 8% of homes let on the open market in England.

Mr Donnell sees the need to create a long-term and sustainable increase in the supply of rented homes and believes that these homes should be designed to meet the requirements of tenants who can be expected to remain in the sector in the long-term.

The report makes the point that housing planners have tended to think in terms of a split between privately owned and affordable housing.

It urges planners to think instead in terms of a split between housing for purchase and for rent, in both the private and affordable housing markets.

Discuss this in the Finance Markets forums

Story link: New terms of reference for buy-to-let