Number of buy to let loans exceeds first time buyer activity for the first time
The number of mortgages issued to buy to let investors has overtaken those issued to first-time buyers for the first time since records began.
The figures have reignited the debate about the impact the booming buy to let market has had on affordable housing across England.
In the last quarter of 2007 81,100 loans were issued to first time buyers - in itself the lowest figure since the first quarter of 2005 and the third worst performance in the last 10 years.
But in the same quarter a total of 84,800 advances were made to buy-to-let investors. It is the first time that investors have outperformed first time buyers since detailed records began.
Loans to buy-to-let investors have shot up over the last few years at the same time as loans to first time buyers have been tailing off. Over the entire course of 2007 350,900 advances were made to buy to let investors and 357,500 loans made to first-time buyers.
In 2001 the figures stood at 72,200 and 568,2000 respectively.
Abigail Davies, principal policy officer at the Chartered Institute of Housing, said the figures ‘must be of concern to the government’.
Ms Davies acknowledged a recent report by the National Housing and Planning Advice Unit, which found there was only a marginal link between the buy to let and first time buyer markets.
But said added: ‘I suspect that the government will still be under political pressure to address the problem of access to owner occupation now because it is the kind of thing that MPs and constituents raise questions about.’
Ms Davies said that some housing practitioners had questioned the findings of the NHPAU report.
‘The NHPAU report says there isn’t a link,’ she said. ‘I think many people instinctively feel that their analysis doesn’t reflect local realities.’
But Ms Davies added that there were now signs that the buy to let market had peaked and was becoming less attractive to investors.
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