Buy to let remains solid despite tax challenges, says...

The head of a buy to let specialist mortgage broker insists the sector remains a solid investment despite the slew of recent regulation and fiscal challenges.

Andrew Turner, chief executive of Commercial Trust, says it is not a surprise that the perception of buy to let has been damaged by recent tax changes in particular.

But he insists the problems are short-term and afflict some but not the majority of BTL investors.

“The expectation was that this would be most keenly felt by those with fewer properties, because adjusting to the changes would be a more painful process for new investors or those with less experience.

“However, the simple fact is that buy to let remains a solid investment option, with strong potential for an attractive and profitable return on capital invested.

“Investors should not be deterred…Demand for rental housing is stronger than ever, the cost of debt remains relatively cheap and the housing shortage is likely to continue.

“Many headlines have focused on one and two property investors who have left the market because they have found it difficult to adjust. The real story has really not been about buy to let becoming unattractive as an investment option.”

Turner says in the second quarter of this year - the latest available figures - UK Finance statistics show remortgages growing by 15 per cent, while actual new BTL purchases appear to have fallen.

“I expect to see market rates increase, because margins are wafer thin … [but] landlords have responded to this and there has been significant interest in fixed rates, useful to guard against rate rises.

“Investors are likely to continue to do this as their renewal dates come up and therefore I’m sure the remortgage market for buy to let will remain buoyant over the coming months.”