Govt 'knew buy-to-let was harming first-time buyers'

Posted: 12 Apr 2010 11:38:59 GMT

A secret briefing to the government while Gordon Brown was chancellor shows that the Treasury was aware that the burgeoning buy-to-let sector was excluding a generation of first-time buyers from the property ladder, it has been claimed.

Campaign group PricedOut states that the Treasury was aware as early as 2004 that the housing market was overheating but chose to do nothing to stop it.

The document, obtained through the Freedom of Information Act, was requested by Tony Blair after he read a newspaper article which suggested that a housing market collapse was on the cards.

Key points in the briefing include a fall in the number of first-time buyers taking out loans for home purchase and the fact that the growing buy-to-let sector was crowding them out.

PricedOut spokeman William Griffith said: "There was a red hot and overheating UK housing market when this briefing was written. The role of the government should have been much greater caution – seeking to slow obvious excesses developing in mortgage lending and the buy-to-let sector."

Paul Holmes, chief executive of Firstrung, believes the government has failed first-time buyers with regards to the raising of the stamp duty threshold, stating that it will have little or no effect on those trying to get a foot on the ladder.


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