Landlords shut door on first-timers

AN INCREASE in buy-to-let landlords is forcing first-time buyers out of the housing market, according to a report today.

House prices have risen for the first time in six months, as the market continues to show a steady recovery since the end of the Iraq war.

But the slight increase last month was largely due to the return of property investors, says the Royal Institution of Chartered Surveyors. First-time buyers are struggling to take their first step on to the property ladder.

It said 13% of homes were sold to investment landlords last month, nearly double the 8% in October 2000. This suggested first-time buyers were being squeezed out of the market by buy-to-let investors.

Rising property values and higher rents have made buy-to-let more attractive than some traditional investments. The market has been boosted by stock market falls and the crisis in confidence over pension funds.

The RICS said demand for property was still outstripping supply, forcing prices up. It has not released figures for the rises. It said 16% more surveyors in England and Wales reported a rise in numbers looking to buy a property during the three months to the end of August, up from 11% in July and 5% in June.

The number of properties coming on to the market has fallen for the third month in a row. Surveyor estate agents had an average of 70 properties on their books, down from a two-and-a-half year high of 77 in May.

Overall, 8% more surveyors reported seeing price rises than those who saw them fall, compared with 2% more who reported seeing a fall in July.

'The summer months are traditionally quiet, so we expect to see an increase in activity as we come into the autumn following the start of the new school year,' said RICS spokesman Jeremy Leaf. 'The national picture is one of quite modest house price rises for the first time this year, although the South is still trailing behind the North.'

The institution said price rises were evident in all northern regions during August, with strong gains in the North-West. Modest prices increases were also seen in the West Midlands and Wales. The rate of falls eased in most southern regions, with homes in the South-West showing the first price rises since January.