A new think tank has published findings that are completely wrong in its analysis of the private rental sector, with the number of buy-to-let mortgages falling, not rising.
In its first housing report, Onward claimed that at the end of 2017, buy-to-let lending was above the 2007 peak. In actual fact, according to figures from UK Finance (backed up by the government’s own statistics), buy-to-let lending for house purchases has fallen from over 183,000 loans in 2007, to just 74,900 in 2017. This is a fall of nearly 60%, making it a significant change.
The government’s own statistics show that the number of private rented homes actually fell by 46,000 in 2017. The total number of buy-to-let mortgages, including re-mortgages, also fell from 339,000 in 2007, to 227,000 in 2017, a drop by about a third.
On the back of its assertion, Onward called for further tax increases to reduce investment in homes designated for the private rental sector, arguing that landlords are taxed more advantageously than homeowners. However, according to Paul Johnson, director of the Institute for Fiscal Studies, “The tax system is not, and was not, even before the recent changes, more generous to people buying to let.”
A new think tank has published findings that are completely wrong: in fact, the number of buy-to-let mortgages is falling, not rising.
Impact of the housing report riddled with errors
With another report today saying that it now takes just over ten years for the average first-time buyer to save for a 15% deposit, the Residential Landlords Association (RLA) argues that this is increasing demand on the private rented sector. As such, taking action to reduce the supply of rented homes available would logically seem a step in the wrong direction.
David Smith, Policy Director for the Residential Landlords Association, said:
“Today’s [Onwards] report is riddled with errors and fails to address the fundamental point that we need more homes to rent, not less.
“Rather than coming out with ideological assaults on the private rented sector, we need to reform tax so that it encourages the development of new homes to rent and longer tenancies so that the sector can adequately provide the pathway for tenants to go from renting to home ownership.”