Joined: 03 Jun 2005
|Posted: Sun Nov 13, 2011 10:58 am Post subject: EU BIDS TO STOP GREEDY BUY TO LET IN UK, GREAT IDEA
EU RULES TO SLASH HOUSE PRICES
The new rules would dry up funds and force hundreds of thousands of people to sell up
Saturday November 12,2011
By Sarah Westcott
A BID by the EU to restrict Britain’s mortgage market would see house prices plummet, experts warned yesterday.
The new rules would dry up funds and force hundreds of thousands of people to sell up.
The glut of homes on the market would then see supply outstrip demand, causing prices to crash.
Brussels bureaucrats want to bring the UK’s crucial buy-to-let sector into line with Continental practice. That would mean landlords could no longer get a buy-to-let mortgage based on rental income.
Instead they would have to rely solely on their personal income. There are about 1.5million buy-to-let mortgages in the UK. Many landlords use second properties to back up their pension.
A Ukip spokesman said last night: “It is outrageous that the EU should try to dictate to lenders and borrowers the basis on which loans should be enacted.
It is outrageous that the EU should try to dictate to lenders and borrowers the basis on which loans should be enacted
A Ukip spokesman
“This unwarranted assault on the buy-to-let market will inevitably result in less affordable rental housing. It will put the lives of 1.5million British inves- tors and their tenants into turmoil.”
The Building Societies Association also spoke out against the move.
Paul Broadhead, head of mortgage policy, said: “If the EU goes down this route lenders could be forced to change the way they underwrite buy-to-let mortgages. In the worst case, people wouldn’t have enough money to finance their buy-to-let mortgages and the sector could potentially stop overnight.
“Three quarters of these buy-to-let landlords are individuals, couples and families and if they cannot remortgage their properties they will have to sell, creating an influx of property on to the market and potentially reducing prices.”
The EU draft directive is set to be voted on by MEPs early next year.
It comes just as Britain’s housing market is rebounding, with average prices up £2,000 last month.
The buy-to-let sector is worth several billion pounds and has reached its busiest levels since 2008 thanks to strong tenant demand.
The private rental sector is also increasingly important to the economy, increasing by almost a million homes in just five years. But the EU plans could put fresh growth under threat by reducing the supply of properties.
Ed Mead, of the Association of Residential Letting Agents, said: “Potential EU legislation might drive many buy-to- let landlords away from what is a vital part of UK housing provision.
“This must be viewed with caution. Our Government ought to be wary of taking a lead from the EU here and actually encourage informed invest- ment into this sector with tax breaks, not lumping buy-to-let in with those residential purchasers who need all the protection they can get.
“Housing minister Grant Shapps should send a memo to his opposite number at the EU: If it ain’t broke, don’t fix it.”
Well its about time first time buyers were given a "fair shake of the stick" instead of having to subsidise some rich mans rent to buy house so they can retire in the lap of luxury, you will probably find most of our, "nose in the trough" MPs have a portfolio as well.
A GOOD IDEA ALL ROUND, ABOUT TIME THE RENTER WAS GIVEN THE CHANCE TO BUY, OUR PARTY WOULD MAKE IT LAW IF YOU HAVE RENTED FOR TEN YEARS YOU COULD BUY IT.