Buy-to-let lending for 2018 looks likely to fall well below its estimate of £12bn, as taxes and regulations continue to have an adverse impact on the buy-to-let market.
At the start of the year, UK Finance had predicted £12bn of buy-to-let lending for residential property acquisitions in 2018, but with tax changes eroding landlords’ returns fewer people are investing in the buy-to-let sector, and as a result Jackie Bennett, director of mortgages, estimates that lending will likely hit just £9bn this year.
Addressing delegates at UK Finance’s annual mortgage conference this week, Bennett said: “Our forecast for 2018 was for around £12bn of buy-to-let purchase – the market looks like it will considerably undershoot this, coming in at more around £9bn.
“This is undoubtedly the impact of various tax, regulatory and legislative changes that have happened to landlords in the buy-to-let sector.
“And with the 2018 tax bills dropping through landlords’ letterboxes, or more likely in their inboxes these days, we are yet to see what further impact this may have on the market.”
But while lending for new property purchases has come in at below expectations, buy-to-let remortgaging looks set to exceed initial forecasts.
According to UK Finance, lending is expected to reach £27bn, up from an estimate of £24bn at the start of the year.