If you think the house price boom is being fuelled by the government's Help to Buy scheme, you're wrong - it's those pesky cash buyers pushing up prices.
That's right, Russian oligarchs and Chinese speculators are fuelling the property bubble in London but there is a bigger, more widespread problem; landlords.
While much angst has been directed at the government's Help to Buy scheme for inflating property prices, that's not actually the case. The scheme has done pretty much what it set out to do which is to allow first-time buyers to afford reasonably priced homes. They haven't been stretching themselves as the tougher mortgage affordability rules won't let them and even the International Monetary Fund (IMF) has said the scheme is working well.
However, the IMF has warned about a potential housing bubble which has led the government to give the Bank of England more power to clamp down on high loan-to-income lending. While high loan-to-income lending isn't ideal, especially when interest rates are about to start rising, I can't help but feel this potential action is misplaced.
New stats by Intermediary Mortgage Lenders Association (IMLA) shows that while house prices are increasing to 2007 levels, mortgage activity remains well below that peak. The reason for this mis-match is because over the increasing number of cash buyers in the market.
With mortgage activity still weak it seems foolish to charge the Bank with overseeing mortgages and tightening up further which is sure to hurt the first-time buyers the government is so desperately trying to help. Why isn't the government looking at curbing the landlords and buy-to-letters to make it less attractive to own multiple properties?
If you've got cash in the bank, buying a property offers a number of lucrative tax breaks on everything from your mortgage interest to the wear-and-tear on the carpets. Even though you have to pay capital gains tax on disposal ,the rental market is booming and can more than make up in income what you'll lose when you finally sell.
Of course we shouldn't let anyone borrow to much but equally the rules shouldn't be skewed to landlords' benefit as it's doing much more damage to the property market than Help to Buy. It's time to tax the landlords, and if they don't like it they should sell up, which would help balance supply and demand in housing stock.