Buy To Let mortgage lending grew 17 per cent in 2015 but faces a potential slump after April, according to property industry data consultancy Hometrack.
“The changes announced by the Chancellor on tax relief for higher rate taxpayers and stamp duty are set to slow the speed of growth in the buy to let market from spring 2016 onwards” warns Hometrack’s chief operating officer David Catt.
“The tax changes could well result in some disinvestment over the next three years as borrowers reduce leverage to align to the lower level of interest tax relief. We still expect some further growth in buy to let lending over 2016 but at a much reduced rate” he says.
Catt’s comments come after the release of new mortgage lending figures by the Bank of England.
The number of loan approvals for house purchase was 70,410 in November, compared to the average of 68,428 over each of the previous six months. The number of approvals for remortgaging was 39,161 - roughly in line with the average over the previous six months.
“Home purchase lending still has the potential to drive stronger lending volumes over the course of 2016 and into the future. The various stimulus schemes provided by the government look set to drive further sales, albeit with a delay as these schemes seek to ramp up activity following launch” says Catt.
“With an interest rate rise on the horizon the greatest potential for growth comes from increased activity amongst existing home owners. Property transactions among those with existing mortgages is at a 10 year low (just 33 per cent compared to 50 per cent in 2007) and we expect that to increase. Overall, we expect lending volumes in 2016 to head towards £220 billion, which is rather less than some may be anticipating.”
%20-%20IMAGE%20Client%20Accounting%20%E2%80%93%20what%20are%20your%20options.jpg)
.png)
Join the conversation
Be the first to comment (please use the comment box below)
Please login to comment