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CML Revises its Buy-to-Let Forecast for 2017 and 2018
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 Council of Mortgage Lenders (CML) has revised its buy-to-let forecast for 2017 and 2018, which is down from previous expectations at the end of last year.
CML Revises its Buy-to-Let Forecast for 2017 and 2018
Its latest gross mortgage lending figures for May estimate that lending reached £20.1 billion. This is up by 12% on both April and May last year, in which £17.9 billion was advanced.
The CML’s buy-to-let forecast for 2017 and 2018 has been revised down from previous expectations at the end of last year, reflecting tax and prudential burdens in the housing and mortgage markets.
The organisation now expects buy-to-let lending of £35 billion in 2017 and £33 billion in 2018 – down from £37 billion in each year, which was forecast in December 2016.
The Director General of the CML, Paul Smee, comments on market conditions: “Remortgage activity and first time buyers continue to drive lending this year. Looking ahead, we expect to see this trend continue, but not as strongly, as the factors supporting lending are blunted by less favourable economic conditions.
“Buy-to-let had a weak start to 2017, and the sector’s contribution to overall net mortgage lending has fallen considerably over the last year.”
He continues: “While falling mortgage interest rates have helped support borrowing, tax and prudential measures are exerting pressure on the buy-to-let market. Following the distortion of the Stamp Duty change on second properties last year, we expected a slight recovery in lending levels. However, this has not materialised, and we therefore have lowered our forecast for buy-to-let lending this year and next.
“This re-emphasises the case for avoiding further changes to the tax and regulatory framework until the effect of these already in train have been properly assessed.”
Shaun Church, the Director of mortgage broker Private Finance, also says: “While it is good to see mortgage lending increase, the market remains sluggish, with remortgaging driving a substantial amount of activity. The home mover market continues to be dampened by changes to Stamp Duty and a lack of new homes coming onto the market.
“The latest forecast on the prospects for buy-to-let mortgage lending clearly demonstrates the damage that has been inflicted on the market by the Stamp Duty surcharge and the phasing out of interest rate tax relief. A healthy housing market requires a range of tenure types to support both buyers and renters.”
