HTB2 = Rental Slump: Why Media Sums Do Not Add up

Simple arithmetic seems beyond some people in the media.

The launch of the Help to Buy 2 scheme by the UK government must equal a private rental slump. And, 2+2=5.

Because, it’s only logical that getting help to buy a home will see a concomitant slump as people will no longer be renting.

If only life and the property market was always so simple. We’d all be speculating millionaires.

Unfortunately, there are a few variables that media doom mongers have neglected to mention.

A shortage of available housing, for example, would render such a simple equation meaningless.

And, every renter as we well know is perfectly poised to dive headlong into buying a property, especially in places like London where you never need to save for many years to assemble a deposit.

Simple Cause and Effect 

Such media commentary deserves nothing more than sarcasm. It’s the classic lets create a panic by simplifying something complex.

Many renters are perfectly content with renting: such as some young professionals living a social lifestyle in city centres.

Many are in no position to buy.

Many could if they compromised on what they want to buy, which they are unwilling to do.

Many may be seeing how their relationship goes with a partner before committing to purchasing a property together…and so on and so forth, ad infinitum.

All of which suggests more strongly that there’s far more lifeblood in rental demand then people being unable to buy dream home util this latest piece of legislation.

Beyond the broad church of people who from the constituency of the rental markets; there’s also issues with the scheme itself. The 5% deposit is no guarantee of acceptance.

More hurdles need to be jumped, and hoops to be gone through to qualify. Will lenders really throw open the gates for anyone with a state guarantee?

The market not the media dictates demand, and it will be telling to see just how many people really start passing up on buy to let opportunities, such as in university areas in the wake of the government scheme. Will it have an effect? Possibly. Will it be a profound effect given all variables? Unlikely.

That’s unless, of course, maths was never your strong point at school.

Matt Davies