Certainly, 2016 has seen landlords faced with some challenging legislations changes, as the Government tries to shift the balance of the housing market.
Former Chancellor George Osborne expressed his desire to return the market to a ‘level playing field’ between homeowners and investors. However, despite the raft of harmful regulation alterations, buy-to-let mortgage lending has actually seen a surge in activity during the last two months.
Increases
According to mortgage provider Connells, the introduction of the 3% extra stamp duty surcharge in April and other tax changes has not deterred investors. The firm’s valuation department reports that valuations for buy-to-let mortgages are actually up by 0.4% on the same period in 2015.
John Bagshaw, of Connells, noted: ‘Despite a bruising period of Government intervention, the buy-to-let sector has been finding its footing over the last couple of months, recovering from the 3% stamp duty surcharge, the restriction of tax relief on mortgage finance costs to basic rate tax only, and the removal of 10% wear and tear allowance.’[1]
‘The Government’s intervention had a significant effect in the short term but we appear to have recovered the lost ground now,’ Mr Bagshaw added.[1]
Buy-to-let mortgage lending defies tax changes
Remortgaging
In addition, Connells report that remortgaging valuation activity increased by 14.7% year-on-year. Many more first-time buyers are still entering the market to take advantage of the Help to Buy mortgage guarantee scheme, which comes to an end this December.
[1] https://www.landlordtoday.co.uk/breaking-news/2016/10/sharp-rise-in-buy-to-let-mortgage-lending-despite-stamp-duty-hike