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.”

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Latest Comments

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

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AbbieP.
AbbieP. 21 Jul 2016

And try to profit from your decisions, I may add

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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...

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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...

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property guru
property guru 11 Jul 2016

Why should Ajay even have to be looking for it. It should be public knowledge. Why is not just publish each years and to were it is and be AUDITED. Accountability.

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property guru
property guru 11 Jul 2016

Surprise suprise

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CommercialTrust
CommercialTrust 30 Jun 2016

This is great news for buyers and investors in a period of significant uncertainty. The 10-year buy-to-let fix at 3.99% in particular is excellent, a clear 100 bps ahead of the nearest competition. Though...

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Lee
Lee 30 Jun 2016

Let's see what happens to north-east property prices when Nissan announce they're leaving.

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DmitriKara
DmitriKara 29 Jun 2016

I just read another article about eviction rising and this was exactly what was on my mind, Housing has become "cat and mouse"...

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DmitriKara
DmitriKara 29 Jun 2016

I am really not surprised. I've seen one too many impudent tenants and in my humble opinion renters have one too many privileges and options to abuse heir landlord in so many ways...

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DmitriKara
DmitriKara 29 Jun 2016

There is still so much uncertainty and I will surely step back and see what's happening before I could make any decisions on my end.

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ChristinaReedUK
ChristinaReedUK 20 Jun 2016

I don't understand why it's always a war between the two sides. Either, way the landlord is probably keeping a detailed inventory and will see the changes you've made. I just don't understand why there...

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