Leap in buy-to-let mortgage activity

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Home loans advanced to UK buy-to-let investors in November bounded 35% from a year earlier, ahead of key tax changes.

The Council of Mortgage Lenders (CML) communicated the rise took the number of buy-to-let loans to 23,300, although this was down 6% weighed with October.

Landlords in England and Wales will have to y a 3% surcharge on each seal duty band from April.

In addition, changes being recall c raised in over the next few years will alter tax breaks available to managers.

“Landlords may be disgruntled by the double whammy of tax changes and the impending hike on tramp duty, but they can’t complain about some of the cheapest buy-to-let places ever,” said Mark Harris, chief executive of mortgage stockbroker SPF Private Clients

“Many landlords are taking advantage of low rates and the expulsion of tax breaks with remortgaging accounting for the majority of activity in the sector.

“However, lenders are effective tighter criteria on buy-to-let mortgages when it comes to stress evaluating, and others are expected to follow, making it harder to qualify for higher loan-to-value mortgages, in rticular in the south [of England] where yields are low.”

The value of loans advanced in the buy-to-let sector developed by 46% in November com red with the same month a year earlier, to £3.5bn.

In the UK mortgage sell as a whole, the number of home loans advanced for house purchases was 9.3% weighty than the same month a year ago, and the CML is expecting a steady rise in mortgage add suit over the next two years.

A total of 60,100 mortgages were pre id in November, although this was down 9.2% from October.

The CML said that the seasonal dip was “rational”.

“Mortgage lending activity eased back as the normal dip in the winter months offed,” said ul Smee, director general of the CML.

“There was still rise across all lending types in November com red to the year earlier indicating continued improvement. Our forecasts antici te that gross lending bequeath continue a slow but steady upward trajectory over the next two years.”

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