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Buy to let and the reconfiguration of Londons’ housing market Steve Wilcox University of York
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
Housing market trends • House price to income ratios • Mortgage cost to income ratios • Regional trends
Housing market affordability in Great Britain All full time earnings and first time buyer house prices
Underlying factors • Sustained economic growth • Lower interest rates • Inadequate housing supply • Availability buy to let mortgages • Growth in private rented sector
Growth in new buy to let mortgages Source : CML website : New advances per half year
Growth in private rented sector in England SEH : Households
Growth in private rented sector in London CLG : Dwellings
Upturn in wider Private Rented Sector& lettings to Housing Benefit claimants Data for Great Britain
Nearly a half of all moves each year are into the private rented sector in England
In London over a half of all moves each year are into the private rented sector SEH : 2006/07
Non decent homes in the PRS Source : English House Condition Survey
Housing market affordability in 2006 • House price to income ratios • Intermediate Housing Market • Affordability of private rents • Renting and Buying compared
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
Proportion of working households in the Intermediate housing marketin 2006 Key
House prices, mortgage costs, rents and earnings compared (1994 = 100) First time buyer house prices and mortgage costs
Future prospects for private renting • Demographics & demand • Investment returns • Crunches & Cycles • Fiscal & policy regimes
Commercial rental returns (UK) Source : IPD UK Residential Index – based on portfolio of 9,040 dwellings
Rental returns ( Central London) Source : IPD UK Residential Index
Rental returns ( Inner London) Source : IPD UK Residential Index
Fiscal & Policy Regimes • The Rugg Review • Capital Gains Tax Reforms • Institutional landlords or better product? • Private renting and mixed communities