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Landlords continue to adopt ‘wait and see’ approach due to market uncertainty

An increasing number of private landlords appear to be waiting to see what impact Brexit and regulatory changes will have on the buy-to-let market before deciding whether to acquire any more properties, new figures suggest.

The latest data and analysis released by LSL shows that in the year to September, the number of buy-to-let mortgages dropped 13%. In contrast, the number of numbers of mortgage loans to first-time buyers was up 0.4% year-on-year.

The figures support separate data released by UK Finance last week, which revealed that landlord investors took out just 6,100 new buy-to-let mortgages to buy property in October, down 9% on the corresponding month last year, while the total value of BTL loans dropped by 20% to £800m.

Analysis of the buy-to-let market by Shawbrook Bank earlier this year suggested that the buy-to-let market could remain subdued until 2021 as a consequence of tax changes and tougher mortgage lending standards.

The ‘UK Buy to Let’ report, produced by Shawbrook Bank and compiled by the Centre for Economics and Business Research (CEBR), identified a marked change in BTL activity following government intervention, contributing to a sharp drop in the number of BTL mortgage approvals for house purchases.

Karen Bennett, ‎managing director for commercial mortgages at Shawbrook Bank, commented: “Whilst the series of government and regulatory changes have had a significant impact on the sector, we have seen the impact felt more heavily amongst the “amateur” landlord community which has presented growth opportunities for professional investors.

“Recent political turbulence has had an amplifying effect on investor confidence but positively, the market remains buoyant for those with a long-term strategy who draw upon specialist advice to fully understand the impact of these policy shifts.”

Despite the drop in the number of buy-to-let investors actively looking to buy property, the BTL remortgage market is going from strength to strength as landlords, look to take advantage of a competitive market and lock into attractive deals.

Jonathan Harris, director of mortgage broker Anderson Harris, commented: “With the number of new purchases remaining subdued, lenders are focusing on where the business is and offering competitive deals to those coming off fixed-rate mortgages - this trend is set to continue into 2019.”

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