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No, that's not the claim. There's waterbed effects. Buy-to-let is done for the purpose of renting. If you take that rental supply away, rental prices go up, and
by IkmoIkmo 5y ago
No, that's not the claim. There's waterbed effects. Buy-to-let is done for the purpose of renting. If you take that rental supply away, rental prices go up, and demand for homes go up. Taking away buy-to-let demand thereby creates other demand that buy-to-let was supplying. You're just replacing the demand, not removing it.
- skybrian 5y agoCould you spell out why this doesn’t just move demand around? Aren’t the same number of people as before looking for a place to live? (I also don’t know what you mean by “waterbed.”)
- IkmoIkmo 5y agoIt does just move supply/demand around, that's the waterbed effect. If you remove buy-to-let investors, then buying a home becomes easier, but not necessarily any cheaper, because the rental supply (from buy-to-let) drops and therefore the prices of rentals go up, thereby increasing the demand for buying a home, countering the lower demand from buy-to-let investors. Demand has been moved around, the shortages are still as big, and there's no significant effect on prices.