Nationwide has seen profits fall following a drop in buy-to-let mortgages as demand for rental properties continue to fall.
It is currently a challenging time for buy-to-let landlords due to recent tax changes, with the stamp duty surcharge and phasing out of mortgage tax relief continuing to bite, while new rules coming into play with regard to letting are also expected to have an adverse impact on the market in the near future.
The consequent fall in demand from buy-to-let investors has contributed significantly to the drop in profits at Britain’s largest building society to £886m in the last nine months of 2017 – down 6% compared with the same period a year earlier.
Joe Garner, Nationwide's chief executive, said: “A subdued buy-to-let mortgage market, plus sustained competition, slowed the pace of growth in our mortgage book.”
The decline in the number of buy-to-let acquisitions was illustrated by a recent IMLA report, which revealed that net investment in buy-to-let property had fallen by 80% from £25bn in 2015 to £5bn in 2017 due to excessive regulatory intervention on the sector.