A senior mortgage lender is warning that government reforms of the buy to let sector could have wide-ranging and unintended consequences.
Richard Fearon, the chief commercial officer of Leeds Building Society, has told FTAdviser that the government’s pledges to deliver new, affordable homes was laudable but measures to clamp down on buy to let landlords - seen as part of that strategy to drive more owner occupation - could damage the prospects for people needing to rent.
“A robust housing market requires a range of tenures to support the different consumer needs. Change can have unintended consequences. For example, the buy to let tax changes could lead to rent increases, making rented property less affordable for those who need it most” he says.
Fearon was commenting on the raft of initiatives including a three per cent stamp duty surcharge, the phasing out of buy to let investors’ mortgage interest tax relief, and the changes to wear and tear allowance.
The Leeds executive says there must be a sustainable and multi-tenure housing market.
“New schemes specifically designed to increase supply in under-served areas of the housing market can create opportunities for us, but it’s important new initiatives complement existing, well established schemes, thereby creating a healthy sustainable housing strategy” he says.
“For example, the government’s objective to deliver 200,000 new starter homes by 2020 should form part of the overall mix of affordable housing opportunities, without having a detrimental impact on supply for other schemes.”