The boss of Aldermore Bank has insisted that the buy-to-let housing market is not about to crumble under the weight of tax changes.
Aldermore’s overall mortgage lending rose by 60% to £542 in first quarter of 2016, as buy-to-let landlords rushed to complete transactions before the stamp duty rise in April.
The bank’s buy-to-let lending increased by 144%, to reach £327m.
Changes
Further tax changes are planned, such as alterations to landlords mortgage interest relief.
However, chief executive of Aldermore, Philip Monks, does not believe that this will be a long-term detriment to the sector.
Monks said, ‘I’m speaking to landlords and they believe the market remains resilient and I think that is borne out by the surge that we saw before 1st April-if people didn’t think the market was going to be sustainable, they wouldn’t be queuing up before the stamp duty increase.’[1]
‘The structural aspects of the market are such that, according to Savills, a further 1.1m households will be in the private rental sector by 2021, even if the Government achieves its house building targets and, frankly, it hasn’t managed that in recent years. I think the buy-to-let market is resilient,’ he continued.[1]
Future for buy-to-let positive, says Aldermore Bank
Brexit uncertainty
Mr Monks also said that he had not yet encountered any negative effect on business sentiment from the forthcoming EU referendum. He did warn however that the poor quality of debates surrounding the issue was not helping businesses.
‘We are seeing continued confidence in investing. People have obviously got an eye on what happens with Brexit, but the quality of debate is such that it is hard for people to make a decision at the moment,’ Monks noted. ‘But we are a UK-only bank and as long as we see the UK economy continue to grow, that is the important thing.’[1]
[1] http://www.telegraph.co.uk/business/2016/05/12/aldermore-bank-bets-on-strong-future-for-landlords/