The chief executive of property investment company Assetz says it’s not Buy To Let that threatens the stability of the housing market - it’s Help To Buy.
Stuart Law says: “The new Help-to-Buy equity loan in London, which offers a 40 per cent interest-free loan up to £600,000 from early 2016, will provide a dangerous incentive for young buyers to join this overheated market at perhaps exactly the wrong moment. The price reversal is pretty inevitable and will push many recent home buyers into negative equity.”
He says this argument is bolstered by recent house price data showing many areas of the market in London slowing, and possibly ready to shift into reverse in the next 12 months.
“For buy to let investors looking to minimise the new tax on mortgage interest and also the three per cent additional stamp duty on investment property, Northern cities like Liverpool, Manchester and Leeds offer excellent prospects for house price growth and net market yields of around five to six per cent” he says.
“The average property price in Liverpool still comes in at under £100,000 and, for investors taking heed of the government’s messages about London and over-leveraged buy to let, the North will become one of the safe-haven buy-to-let locations of 2016 for cash rich investors seeking to minimise their tax costs.”