BTL market will move forward despite changes

BTL market will move forward despite changes

Speaking to an audience of intermediaries and investors at yesterday's Financial Services Expo in Glasgow, Ian Boden, Head of Commercial Mortgages, at Aldermore Bank asked the intermediaries present whether they thought lending in the buy to let market would continue to grow in the next two years.

The audience were split in their response, with 42% saying they thought the market would grow but 33% expecting a decrease.

Mr Boden commented: “A recent survey showed that 29% of landlords say that they are looking to increase their portofolios, so it’s not a market that’s looking to slow down.

Tax and regulation changes were at the forefront of things to consider when looking at how the buy to let market could alter in the coming months.

Most landlords will take this in stride. Many will still see buy to let as being an attractive investment, where they can continue to drive returns through rentals.”

He added, however, that the changes may have some ‘limited’ impact on the lower end of the market, in terms of the ‘pension planner landlords’, and that the market may see a shift towards limited company purchase.


Stuart Law, CEO at Assetz for Investors, said: “In my view, the uncertainty has been removed from Buy-to-Let taxes in the budget.

The Budget has clarified that the 3% additional stamp duty will apply to second residential properties that are bought by individuals and companies alike. It has become a cost of investing in the best asset class for several decades and at the forecast growth rate of 5% in house prices this year will take just 7 months to get back! So let’s move on.

In addition it still looks like companies that are used to purchase buy-to-let property will be able to fully offset their mortgage interest against income and achieve full tax relief. The many and varied company tax reliefs such as a 17% tax on profits and capital growth could also mean that setting up a company actually made matters better for a BTL investor than before the tax changes when investing privately.”

Gráinne Gilmore, head of UK residential research at Knight Frank, comments: “The Government’s reversal on the exemption for large-scale investors is surprising, but unlikely to lead to a significant dampening of interest in the build-to-rent sector.

Bulk purchases of residential units at the lower value end of the scale will be most affected by the Chancellor’s move, which seems counter to the Government’s pledge to provide more affordable housing. But the rental market is an entrenched and growing part of the UK housing market, and as such, institutional investment in this asset class will likely continue to grow.”

Celebrity property expert, Sarah Beeny, had this to say: “The new stamp duty rate increase for buy-to-let investors is definitely coming in and I think it will help to slow price rises at the entry end of the market, which is great news for first-time buyers. I don't think hitting buy-to-let landlords is unreasonable as helping to correct the market shouldn't be at the expense of the tax payer, so I fully support the rise in stamp duty on investment properties.”

Join our mailing list:

Leave a comment



Latest Comments

Spencer Fortag
Spencer Fortag 25 Aug 2016

The funny thing is, I mentioned the brick issue in my blog back in April: http://medwayproperty.blogspot.co.uk/2016/04/the-medway-property-market-and-lack-of.html

view article
SecomTech
SecomTech 19 Aug 2016

Firstly, I either lodge with DPS or do not take a deposit...secondly, If a tenant has not received a confirmation their deposit is secured with either a scheme or in an insured account with an agent/landlord,...

view article
jasonevans
jasonevans 19 Aug 2016

Belvoir has over 15 years of experience in property lettings, buying and renting and is one of the best agencies I know about. I have heard that they revived an award for the hard work. Really amazing...

view article
jasonevans
jasonevans 19 Aug 2016

Usually these areas are least affected when it comes to unexpected economical collapse.

view article
TheWaspNestRemover
TheWaspNestRemover 11 Aug 2016

You agree to pay for the treatment needed to get rid of fleas, ants, mice, wasps nests and other pests unless you can prove that these are a result of us not meeting our repairing responsibilities or these...

view article
madisonwelch80
madisonwelch80 02 Aug 2016

16% is quite a raise. Let's hope this tendency won't continue for long.

view article
madisonwelch80
madisonwelch80 02 Aug 2016

?66,963 is a serious price drop However buying a property it a serious investment only small percentage of the UK population could afford.

view article
madisonwelch80
madisonwelch80 02 Aug 2016

Wow, it kind of surprised me. I mean counting on mom and dad's bank even after retirement is too much. That's the moment in life when one should have ensured themselves. I am shocked.

view article
AbbieP.
AbbieP. 22 Jul 2016

"While house prices in the most expensive eleven boroughs have declined values in the cheapest eleven boroughs continue to rise" - not a nice way to even out the price range. London is overrated as it

view article
AbbieP.
AbbieP. 21 Jul 2016

And try to profit from your decisions, I may add

view article
CommercialTrust
CommercialTrust 19 Jul 2016

Retirement investment has always been one of the biggest draws of buy to let. And the buy-to-let demographic is, on balance, older. (Over a third of our applicants are over 50 at the time of application.) It...

view article
Forrest Wheatey
Forrest Wheatey 11 Jul 2016

I find the time perfect for ever home-owner wannabe. Prices should slowly, but steadily drop, at least for the inner buyer. Making it harder for outsiders to buy properties (the whole Brexit thing means...

view article

Related stories

More articles from Landlords

Specialist Lending Roadshow 2016

20th-23rd September

4 days
6 specialists
4 locations
Free to attend

Click here to register now