Greg Fuzesi, Nationwide's Senior Economist, reports: "As first-time buyers are in short supply and the economy is relatively weak, some of the high levels of activity at the end of 2005 can be accounted for by stronger demand from buy-to-let investors.
Over the last six months, the number of outstanding buy-to-let mortgages grew by 11%, which is much higher than the estimated 1.3% growth for the housing market overall. Buy-to-let investors are similar to first-time buyers in the sense that they represent a net addition to demand.
By contrast, a home mover will both sell an old property and buy a new property at the same time, raising both demand and supply simultaneously. Buy-to-let investors therefore raise liquidity in the market and help to support prices".
