Sunday, 29 September 2019

"That has ignored the evidence..."

Howard Flight, at Conservative Home:

Finally, under George Osborne’s period as Chancellor, the Treasury persuaded him that increasing the tax burden on smaller buy-to-let operators would reduce buy-to-let activity and so make available more properties for owner occupiers to buy.

This has ignored the evidence that there is very little competition for the same properties between buy-to-let and owner-occupier purchasers.

I'm not sure what evidence he has that everybody else is ignoring. But he's clearly ignoring things like this:

From - number of FTBs going up year by year:

From the Financial Times number of BTLs going down year by year:

I am perfectly aware that it is a bit sloppy to compare absolute numbers of FTBs with relative numbers of buy-to-let landlords, but the total number of homes bought and sold has been fairly constant, and that's the best I can track down.

The smoking gun is 2015 - shortly before the new higher rates on BTL purchases came in, there was a spike in BTL purchases with a corresponding dip in FTB purchases.


Rich Tee said...

From recent personal experience as a prospective FTB, there was no doubt that I was competing with landlords. One flat I looked at the viewer told me that somebody else was looking at it to rent out.

I understood that the main reason for clamping down on BTL was due to a warning from the Bank of England. The Conservatives are just completely useless, although in this case they did the right thing for the wrong reason.

(Had to stop looking as I got made redundant.)

Lola said...

Flight is usually quite sound, but he's gone full Tory/Rent/Seeker/ here

Mark Wadsworth said...

RT, thanks for real life example and sorry it didn't work out.

" they did the right thing for the wrong reason." I think they did it because home-owners are more likely to vote Tory.

L, yes, disappointing this time.

Graeme said...

Have you seen this?

L fairfax said...

I remember seeing a nice flat in 2001 - an investor had more money than me and I bought instead of me. (Although in hindsight, I got a nicer one later).
I can't believe how anyone can say such rubbish. Obviously buyers compete with each other. Very few BTL properties- maybe some flats which are not attractive as a long term homes - could not be bought by owner occupiers

Mark Wadsworth said...

G, excellent find, thanks!

LF, ta for anecdotal. We could ask estate agents how often it happens that ftb and BTL express interest in same home...