Landlords outline potential BTL stimulus
It’s no surprise that the two biggest impacts on landlords over the past five years – stamp duty increases and cuts to mortgage interest tax relief – are still being viewed as the biggest factors holding back the buy-to-let market.
However, there is a continued appetite from landlords in this sector and a recognition of a strong tenant demand for quality properties. That being the case, and with a perhaps more sympathetic Government ear, there is a train of thought amongst many lenders that demand for mortgage advice and buy-to-let mortgages will continue to grow. Although its inevitable that some concerns remain around the current economic uncertainty and what might happen in a post-Brexit world.
But how do landlords view this?
Well, the latest landlord research from Foundation Home Loans – in conjunction with BVA BDRC – highlighted that the majority of landlords believe that future Government u-turns on the increase in stamp duty payable on additional property and on the phased-in cuts to mortgage interest tax relief, could provide a significant stimulus to both the buy-to-let and private rental sectors.
When faced with this question, 51 per cent said both measures needed to be addressed in order to help build greater confidence in the sector. 22 per cent said ‘Remaining in the EU’ would give the biggest boost, while conversely 14 per cent said securing the UK’s withdrawal from the EU would help most.
Landlords were also asked whether, in the current market conditions, they would choose to make their first investment in property. In response to this, four in 10 said they would still be willing to invest, saying buy-to-let remained a good long-term investment. The main reasons being that it provided better returns than other types of investments and they still believed property could deliver capital growth. However, exactly half of those polled said that due to Government intervention, regulatory changes, economic uncertainty, and a lack of returns, that they would probably choose not to make a first investment decision at the present time.
When weighing up current market conditions, social demographics and the underlying demand drivers for the private rental sector, advisers are still likely to see a steady stream of landlord clients seeking to remortgage and/or purchase, for many years to come. And the need for specialist BTL advice will only continue to grow as a variety of landlords look to maximise existing and future BTL portfolios. Meaning the future of the BTL sector continues to shine brightly against a somewhat murky economic backdrop.
ARTICLE FROM FOUNDATION HOME LOANS