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29 July 2022

How the rise of buy-to-let landlords fuelled the housing crisis

First-time buyers have been priced out of the housing market by wealthier people.

By Nicu Calcea

In the 20 years from 2000, the proportion of people owning two or more homes more than doubled, according to analysis by the Joseph Rowntree Foundation.

At the same time, the proportion of people aged 16-34 who own their own homes fell from 36 per cent to 21 per cent. “The fall in home ownership against a backdrop of multiple home ownership has, in part, been facilitated by the structure of mortgage market regulations, which have led banks to view buy-to-let landlords as less risky,” said the foundation, which works to fight poverty. 

While landlords have found it relatively easy to borrow, first-time buyers are finding it increasingly difficult. A recent Resolution Foundation survey found that two thirds (67 per cent) of people aged 25-34 who didn't expect to be able to buy said the cost of saving for a deposit was the primary barrier to home ownership.

The Joseph Rowntree Foundation suggests that in addition to more homes being built, the private rental sector needs to be reduced in favour of first-time buyers and social renters. “We must place a much greater focus on the 25 million homes we already occupy, both to address the cost of housing and to explore the strategies, levers and policies which can be utilised to rapidly shift who they are owned by and in whose interests,” the report concluded.

[See also: UK set for slowest economic growth in the G7 next year]

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