Buy-to-let impacts house prices

Posted: 19 Feb 2008 12:16:29 GMT

Buy-to-let mortgages have had only a modest impact on UK house prices.

Buy-to-let mortgages have had only a modest impact on UK house prices.

That is according to a new report from the National Housing and Planning Advice Unit (NHPAU).

However, the report, entitled Buy-to-Let Mortgage Lending and the Impact on UK House Prices, did highlight that prices have been affected.

In fact, by the second quarter of 2007, buy-to-let mortgages had added around seven per cent to the value of the average property.

"Our report shows that without buy-to-let, real house prices between 1996 and 2007 would still have risen by 130 per cent," said Stephen Nickell, chair of the NHPAU.

"Other factors, such as interest rates, growing numbers of households, rising incomes and constrained housing supply have contributed much more to house price inflation.

"That is not to say that the increase caused by buy-to-let has had no effect. If buy-to-let lending is stripped out, then the average mix-adjusted house price in the second quarter of 2007 could have been £169,000 rather than £183,000," he continued.

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