Brokers bracing themselves

Brokers are concerned about the buy-to-let (BTL) re-mortgage crunch as the stamp duty anniversary looms. New research has found brokers are braced for significant issues as they try to deal with what is likely to be a bumper crop of landlords looking to re-mortgage. This is because this April marks two years since the introduction of the higher stamp duty rates for those with more than one property.

Buy-to-let investors rushed to secure mortgages to buy properties ahead of April 2016 when the new rules kicked in. Two years later many will be looking to re-mortgage as their initial 2-year fixed deals come to an end.

BTL brokers expect some problems placing re-mortgage deals for customers this year, this is due to the tighter lending rules for landlords. It seems brokers are clearly nervous about potential issues with BTL re-mortgage cases with the stamp duty anniversary deadline looming.

A record £4.3bn of lending was completed in March 2016 ahead of the introduction of the higher stamp duty rate, with 28,700 BTL mortgages being advanced.

Selling landlords getting good returns

The latest figures found sellers in London gained £253,981, over four times more than those selling outside the capital. One in four landlords who sold their home in London did so for at least twice what they paid for it an average of 8.3 years ago.

Landlords selling in 2017 owned their homes for nearly nine years. In 8 of those last 9 years house prices have risen. Even in areas where price growth has lagged most landlords have made a profit from rising prices.

Landlord gains are slightly behind owner occupiers, who on average made £92,886 when selling their home in 2017/18. The average owner occupier made 7% more than a landlord when selling their home last year. This is because the average landlord selling their property in 2017 owned it for 8.7 years, rather than nine years for an owner occupier.

Buy-to-lets still on the increase

The recent joint crackdown on the buy-to-let by Chancellor and the Bank of England is deterring only the minority of landlords from buying more properties. Small investors looking to buy one or two properties are still increasing due to property still offering a long term profitable return.

Investing in property for retirement is still very popular with 46% saying property is still a sound long term investment recent research has revealed.

Only one in five landlords and would be landlords have cancelled plans to buy more or make their first purchase in the buy-to-let market. Experts first thought all the new measures would severely dent demand, but it would seem this is just not the case. Seven out of ten people asked said they would continue their plans to invest in property for their retirement even with the new rules in place.

Mortgage brokers and lenders alike are currently reporting good volumes of business especially in the re-mortgage market.

Buy-to-lets, still proving very popular!

With savers receiving dismal returns from banks and building societies, thousands more people are still turning to buy-to-let as a means of supplementing their income, fresh income data from HMRC shows.

The figures reveal that the number of private landlords in this country has increased by more than 100,000 a year since 2011-12, with 1.9 million people having earned money from property in 2015-16 as income from property hit £16.2bn, up £4.1bn over four years.

The annual personal incomes statistics, published by HMRC, also reveals that total income from dividends almost doubled over the same period from £42.5bn to £83.8bn as average incomes soared to over £17,000 per investor.

There is little doubt the chancellor will be rubbing his hands in anticipation as these huge incomes from dividends and properties give the taxman two bites at the cherry.