Buy to let valuations fell to just seven per cent of the total valuations market activity in April as the sector paused following the introduction of mortgage tax relief restrictions.
The latest research from Connells Survey & Valuation shows that buy to let valuation activity is now even lower than it in April last year when the stamp duty surcharge was introduced.
“The government’s anti-landlord policies have been hitting smaller players. Over the last year, buy to let valuations have made up less than 10 per cent of market activity, representing a new low in April” says John Bagshaw, corporate services director of Connells Survey & Valuation.
“Buy to let used to be seen as a viable way to gain additional income or to fund retirements, but the gradual removal of buy to let mortgage tax relief will make it much harder for the man on the street to invest” he adds.
Connells’ data for buy to let remortgaging, however, shows it to be four per cent higher in April than the five year average for the month. Buy to let remortgaging is now responsible for 11 per cent of total valuations in the market – a greater proportion of valuations than buy to let purchasing.
“With bigger tax bills, landlords will start to feel the squeeze. To offset some of the rising costs, landlords have been taking advantage of the lower remortgage rates on offer. As buy to let tax relief gradually disappears, remortgaging looks set to be an increasingly popular option with landlords as a way of retaining profitability” adds Bagshaw.