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

Almost half of private landlords have opted to wait to see what impact Brexit and regulatory changes will have on the buy-to-let market over the next 6-12 months before they put any measures into place.

Fresh research carried out by Shawbrook Bank found that 49% of landlords are planning to wait up to a year before deciding what action to take next.

According to the bank’s latest ‘BTL Barometer’, 22% of landlords cited regulation changes as the biggest challenge in today’s market, 21% identified interest rate movements and 16% cited lending restrictions.


Karen Bennett, managing director of Shawbrook Bank Commercial Mortgages, said: “Stricter affordability tests for portfolio landlords and interest rate rises will make it harder for some to get funding and this month will also see the next phase of reductions in tax relief for buy-to-let, further hitting landlords' profits.”

When it comes to regulatory challenges, the change that has most affected landlords is the reduction on the tax relief for buy-to-let mortgages, with 52% of landlords saying this had the biggest impact.

Landlords said the 3% stamp duty surcharge was the second biggest regulatory change that has had an impact, with 21% feeling the effect of this.

To counteract the changes, some landlords are looking for ways to protect their portfolios, with 33% of landlords surveyed having already, or are planning to, set up a limited company, while 18% intend to re-mortgage and 19% are looking to sell their properties.

Bennett continued: “It is encouraging to see professional landlords adapting their strategy in line with regulatory change, thereby helping to ensure the long-term sustainability of the industry.

"We have seen a slight cooling as landlords evaluate their options, not rushing into purchases and holding existing property. It is important to recognise however, that buy-to-let remains a crucial component in the wider UK housing landscape, and data suggests that although investors may tread carefully throughout 2018, they retain confidence in the fundamentals of this market.”

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  • Colin Lillicrap

    I am surprised there is no mention of Minimum Energy Efficiency Standards (MEES) which came into force on 1 April 2018. Landlords owning properties with an EPC rating of For G will not be able to extend a lease or let a new lease without making improvements to achieve an EPC rating of E or better. I would be interested to hear what landlords who find themselves in this position have to say.


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