House price rises due to a number of factors

Published: February 06, 2008

Buy-to-let lending is just one of several factors that have brought social benefits through the increase in house prices over the last ten years, according to a new study by the National Housing and Planning Advice Unit (NHPAU).

The report noted that buy-to-let (BTL) lending, mortgage rate rises and spending habits had all served to inflate house prices since 1996.

According to the figures, the BTL boom of the last five years has had the effect of increasing average property prices by seven per cent, but the NHPAU said that the benefits it had brought far outweighed the disadvantages.

Talking to MoneyMarketing, Stuart Law, of property investment specialist Assetz, explained: "The economic contribution of the private rented sector to the economy is well documented.

"With three million households currently housed by private landlords, it is clear that a much needed service is being provided by investors putting money into the sector."

He added that BTL landlords were also providing housing developers with off-plan pre-sales and subsequently encouraging the development of more housing schemes, something that first time buyers would be reluctant to do.