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  1. Buy to let and the reconfiguration of Londons’ housing market Steve Wilcox University of York

  2. Buy to let and the reconfiguration of Londons’ housing market • Housing market trends • House Purchase Affordability • Intermediate Housing Market • Private Rents Affordability • Renting and Buying • Future trends and PRS policy issues

  3. Housing market trends • House price to income ratios • Mortgage cost to income ratios • Regional trends

  4. Housing market affordability in Great Britain All full time earnings and first time buyer house prices

  5. Regional trends in home owner affordability

  6. Underlying factors • Sustained economic growth • Lower interest rates • Inadequate housing supply • Availability buy to let mortgages • Growth in private rented sector

  7. Household growth and house building 1991 - 2003

  8. Growth in new buy to let mortgages Source : CML website : New advances per half year

  9. Growth in private rented sector in England SEH : Households

  10. Growth in private rented sector in London CLG : Dwellings

  11. Upturn in wider Private Rented Sector& lettings to Housing Benefit claimants Data for Great Britain

  12. Nearly a half of all moves each year are into the private rented sector in England

  13. In London over a half of all moves each year are into the private rented sector SEH : 2006/07

  14. Non decent homes in the PRS Source : English House Condition Survey

  15. Housing market affordability in 2006 • House price to income ratios • Intermediate Housing Market • Affordability of private rents • Renting and Buying compared

  16. House price to income ratios in 2006

  17. House price to income ratios in 2006 Key

  18. Broad and narrow intermediate housing markets Broad intermediate housing market Not in work In work but on HB Not on HB but cannot buy at LD level Cannot buy at LQ level Can buy at LQ level Narrow intermediate housing market

  19. Broad and Narrow Intermediate Housing Market in 2006

  20. Proportion of working households in the Intermediate housing marketin 2006 Key

  21. House prices, mortgage costs, rents and earnings compared (1994 = 100) First time buyer house prices and mortgage costs

  22. Affordability of private rents and mortgage costs in 2006

  23. Rents as a proportion of mortgage costs in 2006 Key

  24. Future prospects for private renting • Demographics & demand • Investment returns • Crunches & Cycles • Fiscal & policy regimes

  25. 2004 projections for London

  26. Commercial rental returns (UK) Source : IPD UK Residential Index – based on portfolio of 9,040 dwellings

  27. Rental returns ( Central London) Source : IPD UK Residential Index

  28. Rental returns ( Inner London) Source : IPD UK Residential Index

  29. Fiscal & Policy Regimes • The Rugg Review • Capital Gains Tax Reforms • Institutional landlords or better product? • Private renting and mixed communities