Buy-to-let uncertainty remains, despite rise in business
There was a modest increase in the volume of buy-to-let business written by mortgage advisers in the first quarter of 2016, according to a survey from Paragon Mortgages.
However, financial advisers told the lender that they have concerns about the longer-term prospects for the market.
Recent government policy, including a Stamp Duty premium and changes to income tax for landlords, has affected confidence in future business, with 13% of advisers expecting all types of mortgage business to decrease over the coming quarter, compared to 50% who expect a decline in demand for buy-to-let.
John Heron, director of Mortgages at Paragon, said: “Over the short term around half of intermediaries expect to see a decline in buy-to-let business. That said, on the question of what impact income tax changes will have over the longer-term, sentiment appears to have improved materially over the last quarter with a sharp reduction in the proportion of landlords that are expected to sell property.
“Increased volumes of remortgaging in the buy-to-let market shows that there is healthy competition with landlords shopping around for a better deal. Whether the market remains as competitive once all the fiscal and regulatory changes are implemented remains to be seen.”