A financial journalist has lambasted the government’s anti-buy to let policies, describing them as “political short-termism ... a vote winner to disguise the fact that this administration lacks a clear, joined-up plan for housing.”
Paul Thomas, editor of Mortgage Strategy, has written on the Conservative-leaning Spectator website that there is not really a war on buy to let - because a war involves two sides to fight, and so far only the government has been causing mayhem.
Thomas says mortgage lenders are now panicking, reducing buy to let mortgages to record low prices - and although this may prop up the market in the short term “the truth of the matter is the buy to let sector is likely to stagnate and even shrink in the long term.”
He says the “damaging double-whammy” of reduced mortgage interest tax relief for landlords and the Prudential Regulation Authority introducing tougher lending standards will combine to damage tenants at least as much as landlords or letting agents.
“The government’s policy intention is clear: it wants to wrestle back housing stock from wealthy landlords so first-time buyers can get on the housing ladder” he says.
“This is political short-termism in its purest form; a vote winner to disguise the fact that this administration lacks a clear, joined-up plan for housing” says Thomas.
He then considers the consequences of a mass sell-off of properties by landlords.
“There is an acute lack of social housing and, while it is now easier to get a mortgage than it was a few years ago, house prices have increased to such an extent that raising a deposit has become an impossible task for some. Moreover, some people simply do not want to own their own home given the flexibility renting offers” Thomas warns.
He concludes with this prospect: “Things could get very painful for millions of tenants up and down the country should renewed attacks force landlords to find new homes for their money.”