From MoneyMarketing:
Nationwide group distribution director Matthew Wyles has called on the Government to introduce tax breaks to encourage more investors to the buy-to-let market. Speaking at the Great Housing Debate last week, Wyles said the buy-to-let sector has become hugely important to the property market...
“We would rather lend at 75 per cent loan to value on a buy-to-let to a hardened, experienced investor than to a 22-year-old plumber who wants a 95 per cent loan. (1)”
Wyles said he does not want to see the sector blighted by regulation and called on the Government to offer potential BTL investors incentives to attract more landlords.
He said: “I do not understand why new lenders are not coming to market more readily. We need to make sure our friends at the regulator (2) cut us some slack around capital weightings so we do not end up with another social need obstructed by regulatory blindness. It is something that should qualify for consideration by the Government for tax beaks. Some fiscal stimulus for the buy-to-let market, as long as it is not too distorting (3), would be welcome.”
Buy To Let Funding Services principal Geoff Laird says: “Were it not for the private landlords entering the buy-to-let sector in the last 11 or 12 years, there would be far less decent property for people to live in (4). Incentives for landlords would be much welcomed.”
1) Yes, of course the bank would rather lend 75% of the value rather than 95%. So that's not a fair comparison.
2) 'Our friends at the regulator' 'nuff said.
3) All subsidies are distorting, and the cost of the distortions always outweigh any benefits.
4) That's right. If the plumber buys the house then he's far less likely to care of it than if he's renting it from the 'hardened, experienced investors'.
Spotter's badge: Jack C at HPC.
Import the Third World
1 hour ago
5 comments:
It is not at all clear to my why he claims :Were it not for the private landlords entering the buy-to-let sector in the last 11 or 12 years, there would be far less decent property for people to live in"
Most BTL properties are second hand ones and/or refurbs. To suggest that a demand for housing can only be satisfied by tax breaks for a particular type of supplier is unacceptable but also economically illiterate.
As I recall, Nationwide was the Coop BS who support(ed) the Labour Party; does Nationwide still do so, do we know?
Anon, that was my sarcastic point 4.
I just went to their website and they are still using the slogan "Proud to be Different".
In what way are they different anymore? I withdrew my savings from them because they slashed their interest rates after the banking crash just as much as every other bank.
"... there would be far less decent property for people to live in (4)"
Why? Would the empty flats/houses transfer to a different dimension?
One of the reasons cited for BTL becoming more important in the housing market is because the price of housing is too high for first-time buyers, so they rent.
So give tax breaks, and see the price of lower-end properties rise as BTL landlords snap them up and adjust rents to match higher prices. Somewhat like hitting your head with a hammer to cure a headache. In this small corner of the world many of the middle-aged asset-and-cash rich who'd watched their houses rise in value (but of course who assure you that they scrimped and saved - yeah, that'd be right) did exactly this and I'm looking forward quite soon to seeing some more of them burned. Not because they made money for a while, but because they were so effing smug. Many of them in my experience have been teachers who as a breed are, it must be said, particularly stupid.
@Techno Mystic: what did you expect Nationwide to do with its interest rates? Leave them the same? And just out of interest, where did you put your savings to get a better rate with more security? Not Icebank or one of its compatriots, I trust? :-))
@VFTS - if you say it often enough, it becomes a fact, of course; once the tabloid "financial experts" have repeated it a few times it might indeed make it all the way to a central part of the "thinking" behind Government policy.
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