Buy-to-let surge 'danger to urban regeneration'

The growing buy-to-let trend in the residential sector is endangering attempts to rebuild Britain's city centres, Sunderland Arc ceo Tom Macartney claimed in the Financial Times. Sunderland Arc is a public-private group set up to regenerate run-down inner city areas.

Macartney said absentee landlords are now buying up swathes of apartments in new developments. Buy-to-let hit record levels in 2006, with 330,000 investors borrowing £38.4 bn (EUR 56.2 bn). In many new developments, absentee investors now outnumber owner occupiers, he said. Figures from the London Assembly suggest that no less than 70% of the 20,000 new apartments built in 2006 were bought by landlords.

Macartney said that transient rental populations make it difficult to create what he termed 'community spirit'. Some developers are introducing caps on buy-to-let investors, limiting the number of investors allowed to buy into new housing schemes.