Why is the government interfering in the buy-to-let market?
The government wants to help first time buyers who are often competing for the same properties as buy-to-let landlords. Currently, high housing prices in some areas are making it impossible for people to afford to buy and an estimated 300,000 people a year, who would otherwise buy, are being forced to rent. The government hopes its tax changes will cool the nations appetite for buy-to-let and help bring the market down.
Will it work?
In all likelihood no. The recent tax changes and the introduction of further controls by the Bank of England may in some areas slow the rate of buy-to-let growth. However, none of the measures will remove the demand that created the buy-to-let explosion in the first place.
Many will also argue that the fundamental problem with the property market is the lack of adequate housing stock and until this is addressed there will be no lasting solution.