A publication about the mortgage industry in the UK has a feature about the impact of buy to let ownership on the housing situation. The writer mentions that legislation was passed in 1998 allowing landlords to more easily rent homes. In addition, mortgages were easier to get. The write states that because of this, buy to let owners were able to buy up stock and hold onto the houses for rental income. This has caused prices to rise, as the supply was lowered.
- The Housing Act of 1988 introduced the Assured Shorthold Tenancy. This allowed landlords to offer homes to rent for a period protected by law.
- Buy-to-Let (BTL) has contributed to rising house prices due to landlords getting tax relief that normal home buyers can’t compete with.
- The number of homes available to purchase is low, leading to higher prices. BTL has contributed to this because the homes bought to rent out do not go back on the market, they are held in a portfolio.
“Unfortunately, once BTL became popular it added to the fuel which powered the price rises because BTL landlords have had tax relief on their mortgage interest and this enabled them to outbid their home buying competition in any like for like situation.”
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