Stable future for buy-to-lets

Forecasts based on data compiled by the Centre for Economics and Business Research have revealed the market will stabilise over the next year and experience growth until 2023.

According to the UK buy-to-let report, which is based on intensive research indicates there has been a marked change in market activity following the intervention by the Government, which introduced changes to mortgage interest tax relief and stamp duty. It came as the Prudential Regulation Authority brought in tougher underwriting standards.

As a result, mortgage approvals dropped in 2016 by 8% and then suffered an even greater fall of 13% in 2017 as the sector adjusted to the new regulations. Reports suggested this alteration was set to continue until 2021 – although it would be less severe than in recent years. Figures now show a steady growth again, especially in the private sector.

Had the Government changes not taken place, the share of buy-to-let mortgages on the market would have stayed higher for longer and averaged at around 13% between 2018 and 2023. What’s more, 360,000 more buy-to-let mortgages would have been issued.

However, as things currently stand, this share is predicted to be 7-9%.

Whilst the series of Government and regulatory changes have made a significant impact on the sector, it is clear things are changing as current landlords and new alike are regaining confidence in the market.

Recent political turbulence has had an amplifying effect on investor confidence but positively, the market remains buoyant for landlords who have a firm profitably policy in place.

If you are looking for a new or re-mortgage please do make contact and one of our qualified advisers will be happy to assist.