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Buy-to-let purchase activity still sluggish
This article is an external press release originally published on the Landlord News website, which has now been migrated to the Just Landlords blog.
The total number of buy-to-let loans taken out by buy-to-let landlords rose in January to the second highest monthly level since the Stamp Duty surcharge rises last April.
Figures from the Council of Mortgage Lenders show that the number of loans taken was at the greatest level, save for November 2016.
Remortgaging
However, rather than loans to invest in needed private rented housing, the activity was particularly driven by buy-to-let remortgage lending, which accounted for two-thirds of total lending.
The volume of loans for buy-to-let house purchases in January dropped to an eight-month low- partly due to the dip in activity during the Winter.
In contrast, buy-to-let remortgage lending reached its highest monthly level since November.
With mortgage interest tax relief set to be phased out from next month and given the fact the Bank of England has been given greater powers to oversee the buy-to-let sector. This in turn will make it harder for many buy-to-let landlords to get a mortgage, as activity levels in the sector will slow further.
Buy-to-let purchase activity still sluggish
Paul Smee, director general of the Council of Mortgage Lenders, noted: ‘Buy-to-let house purchase activity continues to be weak, despite strong buy-to-let remortgage levels. This will likely remain so going forward as lenders tighten affordability criteria ahead of the PRA mandated stress tests and the introduction of tax changes in April.’ [1]
‘Jeremy Leaf, north London estate agent and former residential chairman of RICS, said: ‘While there is little change month-on-month, the figures are encouraging because they demonstrate market resilience – which is what we are seeing at the coalface. Encouragingly, we have noticed a bit of a pick-up in activity over the past few weeks as buyers and sellers seem to be getting on with it as they usually do at this time of year.’[2]
[1] https://www.landlordtoday.co.uk/breaking-news/2017/3/buy-to-let-property-purchase-activity-continues-to-be-weak
[2] http://www.propertyreporter.co.uk/property/house-purchases-fall-to-lowest-levels-since-2015.html
