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The UK is seeing a ‘sustained shift’ away from buy to let, according to one analyst, following new figures released by UK Finance.
According to the figures, gross lending in the buy to let market totalled £2.9 billion in September, a month on month fall of 9%, while the number of BTL mortgages fell by 8% month on month.
Lea Karasavvas, managing director of Prolific Mortgage Finance, said; “Both homeowners and landlords took early hints from Mark Carney, so September represents the tail end of the rush to remortgage on low rates while they lasted. However, owner-occupiers and landlords are not on the same page. Homeowners have been grabbing low rates while they can while the response from landlords has been far more muted.
“This demonstrates a sustained shift as many turn their backs on the market. Landlords are waving the white flag after a severe tax bashing from the Treasury over the last two years.
“This is a statement of intent. Being a landlord is not a hobby, it’s an investment that must pay or it’s simply not worth it. The number of remortgages by homeowners has risen faster than for landlords in the last year and, more recently, is falling slower.
“Many landlords are effectively signalling that the good times are over and they don’t intend to stick around long enough to justify committing to a new deal.”
The fall in BTL lending is being attributed to recent reforms to the sector, including the Section 24 phasing out of mortgage interest tax relief and the increase in Stamp Duty, and the decision earlier this month by the Bank of England to raise interest rates.
Lucien Cook, Director of Residential Research at Savills, said; “When you get that combination of interest rate rises and the loss of tax relief, you’re much more likely to see it hit home.”
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Many landlords have found their finances coming under increasing strain recently as a series of changes to the buy to let market come into effect. The introduction of Section 24, which phases out mortgage interest tax relief, the increase in Stamp Duty on second homes, the cap on tenants’ deposits and stricter lending rules for banks have all impacted the performance of landlords’ investments.
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One of our recent clients, Gary, said; “I had been sold two pig in a poke properties for part of my retirement fund that left me having to keep pumping money to maintain them for suitable tenants. I had been stressed out for the last 10 years trying to keep on top of this investment. Last April I was left with no way to resolve this bad investment as more money was now required to replace the boiler and sort out the damp.
“Coming close to my retirement date I had to walk away. After being recommend to Landlord Debt Advisory and discussing my situation with them, my life has now change 100% for the better. They saved me 64% of my total debt to the lender including the mortgage arrears and legal fees. I had no dealings with my lender, selling both properties and all the legal expenses, as this had been dealt successfully by the team. I would highly recommend anybody out there who need advice regarding debts to talk to Landlord Debt Advisory, as my regret is not doing it sooner.”
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Erm - I am not sure what this "one analyst" is looking at.
New figures released by UK Finance show that both Gross BTL Lending & Number of BTL Mortgages is up 4% year on year.
Look at this quote from UK Finance:" Gross buy-to-let lending totalled £9.3 billion, up 11 per cent on the second quarter and up four per cent on the second quarter of 2016. This equated to 60,000 mortgages, up eight per cent on the previous quarter and six per cent year-on-year. "
_________________________________________________________________________The above post is not financial advice, its often me rambling - passing time on a coffee break.If you are looking for the Best BTL Mortgage? Call the Specialist Team at Bespoke Finance._________________________________________________________________________
From my own point of view the more that leave the sector the better
I dont have much compitition now so it can only do me good
Let the weak go the PRS will be better with out them
Sounds hard but its what I see in my world
Learn Change and Adapt ?????
All comments are for casual information purposes only. If you wish to rely on any advice I have given please ensure you obtain independent specialist advice from a third party. No liability is accepted for comments made.
The quicker the PRS REDUCES in size the better
Then we'll have millions of homeless and Govt will have to come crawling back to private LL.
I've had someone ask if I know of any LL that has a 3 bed house to let in Bishops Stortford
I haven't but if anyone out there has I have the phone no for this desperate tenant.
I have no interest at all in the hardships being caused by Govt
I need things to get so bad for tenants that councils run out of TA.
Then they'll have to use old army camps.
Then Govt might U turn on its stupid anti- LL policies.
Not sure your maths add up, DL.
If a property is rented or owned it is still a home for one household.
The only thing that changes with less landlords is the properties potential tenure. Not less competition.
Want more demand on our services? subdue housebuilding.
Lets make this simple adam
Landlords buy because they see investment potential in a BMV Deal or maybe a good yielding property so they purchase on price
A FTB Home owner buys for a different reason its because they want to live in a house of there choice for family reasons
They don't buy on price they buy with a Budget
If they can afford the House they love they move with the help of the govt low stamp duty ect and they will get more Tax bakes from this Budget for them to purchase the
house they love
Prices will rise with this The Banks are lending more to FTB and I think the 95% Mortgage is back
so any landlord who owns a investment now will see growth in the future We are seeing this in the North Now
3 x salary mortgage is reality in the north still money is cheep so we are seeing huge amounts of building and investment
I cant comment on the South its not my market but up here the FTB is back
so prices will rise That makes me richer Adam
We are seeing the cull start on weak Landlords with very little cash flow
I belive its a good thing
weak landlords are less likely to pay by the rules as you have suggested before
they will have most likely a job and BTL is just a bit on the side
They will mostly Not follow the rules No CP12 No EPC ect
and they will move on thank goodness
The ones who will go will not see the changes we have because they are busty avoiding rules
They will not be on PT