It’s because the market has become distorted. It’s not just about too many buyers chasing too few properties. It’s not about interest rates. It’s because first time buyers are not just competing against other first time buyers but also the buy-to-let market. So why the distortion?
It’s because councils no longer own sufficient stock to meet their social housing responsibilities. Too much of it has been sold under right-to-buy and more than 40% is now owned by private landlords. So councils have to rent-back properties on their own estates to meet their statutory housing responsibilities and pay those inflated costs through the housing benefits system. It is that state-subsidised demand which has pushed private-sector rents and property prices through the roof. Everybody loses: the taxpayer; first time buyers; private renters. Everybody that is, except the private landlord. V. Charles Ward, Author, ‘Housing Regeneration: a Plan for Implementation’
