Buy-to-let 'added to housing pressure' say National Homebuyers

The growth in buy-to-let investment over recent years has added to the increase in average house prices, according to a new study into its impact on the housing market.

[UKPRwire, Mon Feb 18 2008] Research carried out by the National Housing and Planning Advice Unit found that the cost of an average property is £14,000 higher as a result of buy-to-let investment.

According to the report, during the second quarter of 2007 the average house price would be £169,000 instead of £183,000 if buy-to-let was not factored in.

Despite this, the study pointed to factors such as interest rate rises, increasing household numbers and supply limitations as having a greater impact on property affordability.

The Bank of England is due to announce its base rate decision on Thursday, February 7th, with a number of analysts anticipating a quarter percentage point cut.

"Despite calls for a 50 basis point reduction, we expect the Bank of England to trim interest rates by 25 basis points to 5.25 per cent," said Howard Archer, UK chief economist for Global Insight.

"We suspect that only a further very sharp fall in equity prices next week and last minute data indicating that the UK growth outlook has started to deteriorate sharply could possibly prompt a 50 basis point cut."

Fast property sale expert Julian King says, "The issue facing most current and would-be mortgagees is that the recent interest rate cut is unlikely to be passed on by the banks.

"There is still a significant amount of catching up to do by the banks as a result of the credit crisis and it's highly unlikely that the a rate cut will be evident in borrower's arrangements".

Mr King is a director of National Homebuyers, the UK's leading quick property sale firm that guarantees to make an offer on any property in the UK, regardless of its condition or location. The company also offers the Sell and Rent back solution for homeowners to release equity, but remain living in their home.

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