Each week, we also round-up the best comments, emails and letters to the site and pick one reader contribution as our Star Letter. This week’s award goes to:
Can Help to Buy 2 derail the buy-to-let market?
Mark Prisk claimed back in March that H2B will account for only around 2% of the transactions predicted to take place in the next three years. Of course, the closer the market is to saturation, the more of an effect that 2% will have.
I agree with Vicky; the strict criteria and lack of an investment angle will deter many under-informed applicants. The Bank of England has also been given limited scope to ‘advise’ the government to increase the amount it charges lenders for the mortgage guarantee and/or lower the £600,000 maximum value cap.
If you look at the difference between what £600,000 will get you in London and what it will get you in Middlesbrough, the leap is absolutely staggering. Any bubble taking place is not UK-wide, true, but that doesn’t mean concerns should be ignored.
After all, I’d readily bet that a lot of the interest in H2B is, and will continue to be, from people in the South East hoping to buy their first otherwise unattainable home. Rental yields are already squeezed in the city – a couple more percentage points might be all that’s required to deter buy-to-let investors en masse.
In short, H2B should be carefully monitored, and it absolutely must be accompanied by a higher level of house building. Messrs Hopkins and Williams have their work cut out for them.
TurnKey Landlords
