Buy-to-let tax break plan attacked as further blow to first-time buyers

• Campaigners say landlords already have upper hand
• Treasury says proposals will provide more housing

Thousands of first time buyers will be priced out of the housing market if the Treasury presses ahead with plans to offer new tax breaks to buy-to-let investors, campaigners warn today.

The sharp rise in buy-to-let mortgages during the housing boom was blamed for inflating prices and creating a shortage of starter homes for people trying to get on to the property ladder.

After the Council for Mortgage Lenders (CML) reported a sharp drop in the number of first-time buyers entering the market since the credit crunch began, PricedOut, a lobby group, said the government risked exacerbating the unfair advantage already enjoyed by buy-to-let landlords.

The Treasury published a consultation paper in February which included plans to boost the supply of private rented housing. One key proposal was for professional investors to pay stamp duty separately on each home, even when they buy a large portfolio of properties, reducing their total bill.

PricedOut, which campaigns on behalf of first-time buyers who are not able to enter the property market, says the proposal is grossly unfair to first-time buyers and would make their struggle to buy a house even more difficult.

William Griffith, spokesman for PricedOut, said: "The large tax breaks that buy-to-let currently enjoys mean that they can always outbid first-time buyers. It is astonishing that the government is seeking to further entrench this disparity in the housing market. High house prices and buy-to-let speculation have been behind a large growth in wealth inequality and have caused increased financial instability."

PricedOut calculates that high house prices, driven in part by the rise in buy-to-let, have displaced an estimated 1.2 million new households away from owner-occupation, and led to about 1.4m fewer first-time buyer mortgages since 1999.

A recent report by the Council for Mortgage Lenders (CML) found that levels of owner occupation were at their lowest since the 1980s.

A Treasury source said the proposal was aimed at increasing housing supply, but PricedOut argued that instead, buy-to-let investment has created a net loss in the supply of houses available to first-time buyers and other owner-occupiers.

In the last six years, 647,300 homes have been bought up by buy-to-let investors when otherwise they might have become available to other buyers.

"The public face several years of higher taxes and spending cuts – it is frankly baffling that the government is trying to give further tax breaks to a sector that helped get us into our current economic mess," said Griffith.

"Unless we want future home ownership to be a preserve of the wealthy few, we need the government to tax property speculators more, not less. Removing buy-to-let tax breaks would be a very popular and practical way for the chancellor to start addressing the deficit."

Mortgage figures from the CML released last week showed that first time buyers were once again struggling to enter the property market. The number of loans for the first-time buyer market plunged 54% in the month to January to stand at 11,300. The CML said this reflected the fact that a high proportion would usually be buying homes costing between £125,000 and £175,000, on which stamp duty was reintroduced at the end of last year.

Jonathan Moore, director of Easyroommate.co.uk, said: "First-time buyers were struggling to raise the huge deposits needed by lenders before the end of the stamp duty holiday. That's only got worse. Without help from the bank of mum and dad, many just can't borrow enough to get a flat. Thousands of young people are being forced to … squirrel cash away for more than a decade."

Let's move to Huddersfield, West Yorkshire

Just another grimy, post-industrial town? Far from it – it's the new Leeds, don't you know

What's going for it?

I'd never thought much about Huddersfield. Just another grimy post-industrial town, I guessed. But then I was listening to Radio 4's The Food Programme, all about a co-operative of artisan bakers on the edge of town. Hmm, I thought. File that. And then I recalled Incredible Edible Huddersfield, the grow-your-own community movement à la Hugh FW. Double hmm. And then I cross-referenced this information with the Ofsted reports (really very good). Triple hmm. And then the Lady Wife drew my attention to its reputation for doughty Victorian civic buildings. And then I went there. The blind can now see! Huddersfield's a marvel. A booming uni, the Pennines on the doorstep, a history of community-minded leftiness, a cultural scene especially rich in music and, let's get materialistic, great, great property at lovely prices. Three words: the new Leeds. Two more: move there.

The case against

Has had more than its fair share of ring roads, cruddy 60s shopping centre. Redevelopment long promised for the centre.

Well connected?

Very. The M62 swings by and the M1's 20 minutes away. But the real boon is the railway: Manchester (40 minutes) and Leeds (25 minutes); plus services to Barnsley, Bradford, Sheffield, Halifax. Direct, too, to Scarborough, York and Liverpool.

Schools

Splendid. "Good" primaries, says Ofsted: St Patrick's Catholic, Moldgreen Community, St Joseph's Catholic, Golcar, St John's CofE, Crow Lane, Fixby, Moorlands, Nields, Paddock, Scapegoat Hill, Slaithwaite CofE and Wellhouse. "Good" primaries with "outstanding" features: South Crosland CofE, Repton, Rawthorpe. "Outstanding" primaries: Lindley, Newsome, Linthwaite Clough, Rowley Lane and Spring Grove. "Good" secondaries: Fartown, Rawthorpe, Royds Hall, Salendine Nook, King James's and Almondbury; Moor End "outstanding"; independent Huddersfield Grammar well regarded, too.

Hang out at…

Good local restaurants and cafes, like Vanilla and the Dining Rooms. Me? I'll have a pint of mild at The Rat & Ratchet, famed for its ales.

Where to buy

The south, north-west and west for best, everything from stone cottages to vast villas. Nice villagey inner urban spots, too.

Market values

Vast detacheds, £750,000-£1.25m. Sizeable detacheds, Victorian villas etc, £350,000-£750,000. Standard detacheds, £150,000-£350,000. Semis, £80,000-£400,000 (big Victorians). Terraces, £50,000-£270,000 (period cottages).

Bargain of the week

Fancy a Victorian mill, all 3,717 sq m of it? Stone built, west of the centre, bit of a project – £430,000, with Walker Singleton (01484 477600).

From the streets

Catherine McGrath "The place has spirit, real diversity and beautiful buildings to boot."

Becca Spavin "Huddersfield station: a magnificent building with two real ale pubs on the platform."

Neil Clakson "Coffee Evolution is a great cafe with a funky bar and good for people watching from the window. The monthly poetry nights at the Albert are an institution."

Alison Munday "A busy town, kept vibrant by the universityand events like the annual Contemporary Music Festival (http://www.hcmf.co.uk/), the Kirklees Mela and the Huddersfield Carnival."

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