Buy-to-let demand in Q1 is excepted to fall according to Lenders

By: James Newland

Lenders have predicted that the buy-to-let finance will fall in the first quarter, which has proved to be the case so far as stated in The Bank of England’s Credit Conditions Survey.

Buy-to-let demand in Q1

Mortgages have increased in the fourth quarter of 2016, with demand rising significantly for buy-to-let and remortgaging and slightly for residential. There was an obvious incentive for landlords to do business in the final quarter of 2016, which led to an increase in buy-to-let borrowing.

Majority of investors would have wanted to beat the Prudential Regulation Authorities tightening up on buy-to-let affordability checks, which came into force on 1st January 2017, as well as the forthcoming changes to income tax relief on finance costs.

Buy-to-let pricing has remained generally unchanged, this has therefore encouraged activity, particularly from landlords using limited companies as borrowers.

Lenders expect the availability of mortgage finance above 75% loan-to-value to bounce back slightly in the first quarter of the New Year after seeing a slight fall at the last quarter of 2016.

The Bank of England’s Credit Conditions Survey showed that in 2016 there was a demand for buy-to-let borrowing which increased significantly despite the tax changes introduced in April 2017 and it is unlikely to show an increase in mortgage volumes, but we can expect to see a continued but slower upward trend over the next year.
Source: Bank of England and Mortgage Introducer