Landlords do not push up house prices

Published: February 22, 2008

The Association of Residential Lettings Agents (Arla) has leapt to the defence of buy-to-let property investors.

According to the organisation, suggestions that landlords are pricing first-time buyers (FTBs) out of the UK property market are "a load of rubbish".

It follows a claim by the National Housing and Planning Advice Unit (NHPAU) that buy-to-let mortgages have had a limited role to play in rising house prices.

Malcolm Harrison, Arla spokesman, said that buy-to-let investors tend to be interested in properties that most FTBs would not be able to afford anyway.

"The buy-to-let investor tends to go into the middle market; and buy-to-let, until very recently, has done no more than refinance big chunks of the private rental sector, and only in the last year or so has actually helped to grow the private rental sector," he explained.

"It's been quite extraordinary that the private rented sector stayed at about ten per cent of all housing upuntil a couple of years ago and now it's risen to just over 12 per cent.

"In fact what we want buy-to-let to do is to increase [within] the private rental sector, because it’s still very small," continued Mr Harrison.

Paragon has recently revealed that average rental yields rose to 6.3 per cent in January.