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

Tony Gimple
Tony Gimple 09 Dec 2017

Linking professionalism to limited company borrowing is a flawed concept. Despite S24 etc., limited companies are the most tax inefficient way of running a property business and leave borrowers seriously...

view article
Evelyn Attwood
Evelyn Attwood 01 Dec 2017

It's normal. If you plan to buy a house in one of the most beautiful spots in the country you should pay a high price.

view article
Evelyn Attwood
Evelyn Attwood 01 Dec 2017

I think that the situation will be the same at December.

view article
Scott Garnet
Scott Garnet 06 Nov 2017

If you have a patio or a porch it is important to make sure that any connecting doors are secured. Good advice for sliding glass doors is replacing the panels with storm resistant glass and getting heavier...

view article
richardrawlings
richardrawlings 01 Nov 2017

What has not been mentioned here is the effect of not only higher interest payments, but also that these payments are less likely to be offsettable as a business cost due to the scaling back of mortgage...

view article
Kelvin Lloyd
Kelvin Lloyd 09 Oct 2017

IT is up, to the Planners. If they will only give permission for bungalows on certain (suitable) sites, they will be built.

view article
maggie swift
maggie swift 09 Oct 2017

It's just the beginning of the shocking rise.

view article
maggie swift
maggie swift 09 Oct 2017

I have recently read that the bungalows can provide social housing for elderly residents in London.

view article
zoe glover
zoe glover 05 Oct 2017

Update! Worst company I have ever dealt with. Undervalued a Cambridge property by over 100k, wont take on any evidence of valuation including a RICS valuation done 3 years ago for the very same value...

view article
Paul Edwards
Paul Edwards 27 Sep 2017

Its nonsense articles such as this that make it harder to get clients to realise just how difficult the market is out there. When you see Rightmove and there are more 'price reduced' then 'new' most days...

view article
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

Related stories

More articles from Landlords