AS WE noted earlier this month, soaring house prices in Britain have put homeownership out of the reach of many young Britons. Although there are many causes behind this—such as the difficulty of finding graduate jobs, population growth and a chronic shortage of new housebuilding—policymakers are now turning on Britain’s growing number of buy-to-let landlords. Earlier this month, George Osborne, the chancellor of the exchequer, announced that he was trimming tax relief for interest payments on buy-to-let mortgages (a handout that those with owner-occupier mortgages do not receive). And the Bank of England revealed that it had launched a review about tightening up rules for lending to landlords. These measures, some hope, will level the playing field between owner-occupiers and buy-to-let landlords in accessing mortgage finance, helping to solve Britain’s affordability crisis. But research suggests that they are likely to be disappointed.
Nevertheless, it is true that the loose regulation of buy-to-let mortgages is difficult to defend, not least...Continue reading
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