"Buy-to-let booming!?"

I know the latest headlines are proclaiming a buy-to-let boom.  I don't think so.  I would call it steady growth when much of the rest of the economy has stagnated, shrunk or flat lined.

Ex-Chancellor Steps Into The Breach

The latest politician to throw his opinion into the ring is the ex-Chancellor Norman Lamont according to reports in the Guardian probably most famous for being in charge when we were forced out of the ERM (predecessor to the EURO). His concern relates to the increase in buy-to-let lending as interest rates have fallen for all mortgages as Government measures kick in to bring down the cost of borrowing and stimulate the ailing housing market.

'Sympathy'-With Anti Intervention

On a political point I have some sympathy with anybody that argues against government intervention in any markets which generally subverts and perverts the operation of the pricing mechanism.  House prices are still too expensive if you look at the long-term price to earnings multiples (they should be nearer 2 but are at over 4) but they seem 'affordable' because public policy has pushed down interest rates to practically zero to stop the economy going into a massive contraction.

Buy-to-let Healthy

My view is that neither buy-to-let or the housing market are booming they are just healthy and returning to normal as a result of a massive government stimulus and buyers and landlords being able once again obtain mortgage finance.  But headlines like 'boring boring buy-to-let' isn't going to grab anybody attention so landlords will just have to get used to 'buy-to-let booming' whilst us real landlords know this means we are just doing alright! Boring after the last few years is good!

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