BTL valuations drop in April

BTL valuations drop in April
Over the last year, buy-to-let valuations have made up less than 10% of market activity, representing a new low in April

The latest analysis and data from Connells Survey & Valuation has revealed that there was a 7% dip in buy-to-let valuations recorded in April - widely believed to be caused by the start of the reduction to landlord’s mortgage tax relief.

According to Connells, the proportion of buy-to-let valuations is 6 percentage points below the five year average for April. Buy-to-let valuation activity is even lower than it was in April last year – when the stamp duty surcharge was introduced.

The decline in buy-to-let valuations has likely been driven by the stamp duty surcharge and the cut to buy-to-let mortgage tax relief. As of April, landlords can only offset 75% of mortgage interest payments against rental income – down from 100% in March.

John Bagshaw, corporate services director of Connells Survey & Valuation, said: “The Government’s anti-landlord policies have been hitting smaller players. Over the last year, buy-to-let valuations have made up less than 10% of market activity, representing a new low in April.

This could suggest that smaller, private landlords, who typically use buy-to-let mortgages, have not been investing on the same scale as previously seen. Buy-to-let used to be seen as a viable way to gain additional income or to fund retirements, but the gradual removal of buy-to-let mortgage tax relief will make it much harder for the man on the street to invest.

Having said that, buy-to-let valuations only fell 1% month-on-month and so the comparison with the five year average doesn’t always tell the whole story.”


Rise in buy-to-let remortgaging

While buy-to-let valuations have declined as a proportion of market activity, buy-to-let remortgaging is 4 percentage points higher than the five year average for April, as landlords look to refinance. Buy-to-let remortgaging is now responsible for 11% of total valuations in the market – a greater proportion of valuations than buy-to-let purchasing.

John Bagshaw said: “With bigger tax bills, landlords will start to feel the squeeze. To offset some of the rising costs, landlords have been taking advantage of the lower remortgage rates on offer. As buy-to-let tax relief gradually disappears, remortgaging looks set to be an increasingly popular option with landlords as a way of retaining profitability.”

First-time buyer valuations rebound to 34% of market activity

The proportion of first-time buyer valuations has increased to 34% in April, up from 32% in March.

John Bagshaw concluded: “First-time buyer activity has sustained the market, as buy-to-let borrowing has declined. It’s encouraging to see first-time buyer valuations pick up again in spring. First-time buyers have been responsible for more than 30% of valuation activity for over 12 months, as more aspiring homeowners get their first foot on the ladder. It remains incredibly difficult to save for a deposit, but the lower cost of borrowing, combined with less competition from landlords, has meant more first-time buyers have been able to purchase a home.”

Join our mailing list:

Leave a comment



Latest Comments

Tom Allen
Tom Allen 20 Sep 2017

Absolutely agree with you!

view article
RyanGeo
RyanGeo 18 Sep 2017

A sharp correction would be a less dramatic expression to use. That is already underway in certain sectors in Reading where I practice as Chartered Surveyor

view article
sean benton
sean benton 01 Sep 2017

Identity theft is a thread for any profession. So,people should stay alarmed. I once take help from a letting agent and came to know that letting agents are taking every precaution to prevent fraudulent...

view article
Mark N.
Mark N. 30 Aug 2017

We have seen a surge in instructions over August and that should continue into September too.

view article
Chris
Chris 30 Aug 2017

Unfortunately, all the legislation bears its force on Landlords and ignores, naively, the effect of Rogue Tenants on the ability of landlords to keep houses in repair and offer properties for rent at reasonable...

view article
Christian Donovan
Christian Donovan 18 Aug 2017

The write-down on house values, combined with the fall in the GBP saddled the fund?s property portfolio with a 1.4% loss in the second quarter. The shocking amount of $240 million.

view article
Samantha Goodman
Samantha Goodman 11 Aug 2017

Interesting point of view.

view article
Samantha Goodman
Samantha Goodman 11 Aug 2017

It depends on the people, some older adults decide to make a long-distance move in order to live closer to their children or settle in a place with a lower cost of living.

view article
brandonlee10
brandonlee10 24 Jul 2017

The financial ramifications of the triggering of Article 50, the starting gun for Britain's departure from the EU, are far from clear. Buyers will be most cautious in London, given that buying a home in...

view article
IrisJ.
IrisJ. 19 Jul 2017

Great advice, but may I also add that when buying an already built home, make sure you do all of the proper inspections. Most importantly pest inspection because people tend to get surprised when they

view article
IrisJ.
IrisJ. 17 Jul 2017

The third point is, in my opinion, the most important one. People have become too inconsiderate and careless when it comes to rented properties. If a landlord wants to protect their property, regular visits...

view article
cornishalan
cornishalan 10 Jul 2017

Added to the cost of purchasing these village properties are the above average maintenance costs. Particularly where the property is a listed building or requires specialist building skills such as thatching...

view article

Related stories

More articles from Finance

Property Finance Roadshow 2017

4th - 12th October

4 days
6 specialists
4 locations
Free to attend

Click here to register now