Buy To Let lending to take a fall
The surge in investment purchases at the end of March before the 3% stamp duty change is set to change as demand for buy to let mortgages in the coming months is expected to fall "significantly" according to a Bank of England survey.
The Bank's Credit Conditions Survey, which monitors the expectation of UK banks and building societies, found that lending on owner-occupation purchasing was likely to rise sharply in the second quarter of this year, but that the reverse will happen for buy to let mortgages.
The survey's results came within minutes of a statement from the Council of Mortgage Lenders reporting that £3.7 billion in loans to landlords were released in February - a whopping 61 per cent rise on the same month in 2015 . confirming the push to get investment purchases before the stamp duty hike.
What does this mean for the BTL market? As always with any change there is always a certain amount of resistance to start with as people come to terms with the costs involved in buying an investment property but after the first initial reaction, acceptance will follow and investors will come back to the market.
The difference will be that the investor profile going forward will be different. Landlords will have to look at the even longer term to recoup the money they have spent out and should be considering their investment will need to run for 10+years. Also the changes will inevitably lead to a more professional type of landlord coming to the market or expanding their current portfolio, push out the smaller 'accidental' landlords.
The future of Buy To Let still looks strong as is still is a sensible investment and will give a better rate of return than simply leaving cash in the bank and relying on a very small level of interest. The most important factor is that any investor buys the right property and uses a local agent to protect them from all the legislation and complexities involved in letting out a property.
For free, impartial advice on buying a property to rent and maximizing your rental return, contact the office today on 01872 225354.