Simon Checkley, managing director of Private Finance said residential income multiple caps and the income limits on the Help to Buy scheme are holding back home buyers where in contrast unregulated buy to let lending of up to 85% loan to value (LTV), often in interest-only, is spurring on this market.
The 2015 British Mortgage Award winner, Business Leader under 20 brokers, said: “The outlook for house price growth remains heavily influenced by the buy-to-let sector. Therefore, we are calling on regulators and policy makers to consider the effects of MMR on residential lending levels which, if maintained at their current level, could potentially exclude an entire generation of home buyers from the property market and force them into the private rental sector for years to come.”
He added stifling activity in the housing market increases house prices by reducing supply.
“If existing homeowners had access to mortgage products which promoted affordability they might be inclined to bring their properties to the market thus increasing supply. These measures coupled with policies promoting development and house building could stimulate an otherwise lacklustre property market whilst simultaneously stirring up general economic activity.”
Checkley added that barring first-time buyers from products on offer to buy-to-let investors is unfair.
He called for government and the regulator to work together to encourage home movers with more flexible and innovative products, like a two-year interest-only loan which progresses on to graduated capital and interest payments.
He added: “Similarly, it is also our firm belief that younger buyers should consider doing what generations before have done and make certain lifestyle compromises in order to gain exposure to the market early on to avoid being forever tenants.”