Limited impact of buy-to-let on house prices


Tue 19th Feb, 14:52:15 GMT

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

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

It found that property prices were inflated by around seven per cent by the second quarter of 2007 due to buy-to-let mortgages.

However, other factors have helped to boost prices which have experienced massive growth in recent years.

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

"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 added.

The latest Halifax house price index revealed that the average UK property price remained constant between December and January.ADNFCR-1143-ID-18473916-ADNFCR


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