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Demand for buy-to-let ‘has never been so low’

The number of people investing in the buy-to-let sector is falling at an alarming rate, while many existing landlords are selling their properties ahead of changes to mortgage interest relief, according to a senior letting agent.

Buy-to-let lending improved during the fourth quarter of 2016, with the share of lending for acquisitions in the buy-to-let market increasing from 28% in Q3 to 38% in Q4, which was comparable with the 38% recorded in Q2 last year, according to the latest Mortgages for Business’ complex buy-to-let index.

But with mortgage tax relief set to be phased out from next month and now that the Bank of England’s Financial Policy Committee has been granted greater powers over the buy-to-let market, making it harder for many property investors to get a mortgage due to new tougher mortgage affordability tests, activity levels in the sector is slowing dramatically, according to Sacha Moussaieff, director at Milton Stone.

The central London agent commented: “In my twenty years of agency the demand for buy-to-let property has never been so low and landlords have been driven out of the market.”

He also pointed out that “the extra 3% stamp duty” on top of additional taxes “means that becoming a landlord is extremely unappealing”.

Moussaieff added that he fully expects to see rents rise to combat the “new tax laws on rental income”.

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