Activity in the buy-to-let mortgage market took a further dip in May as the combination of tighter tax and mortgage rules continues to take its toll on landlords.
Figures released yesterday by UK Finance show that there was a near 10% drop in new buy-to-let home purchase mortgages last month, as a series of reforms, including the phasing out of mortgage interest relief, continues to have a punitive effect on landlords.
Some 5,500 new buy-to-let home purchase mortgages were completed in May, down 9.8% compared with the corresponding month last year, reflecting the changing regulatory and fiscal environment for landlords. By value this was £0.7bn of lending in the month, 22.2% down year-on-year.
Many landlords are taking this opportunity to reappraise the viability of their portfolios. But while new investment in market falls, remortgaging levels continue a strong upward trend.
There were 14,600 new buy-to-let remortgages completed in the month, some 15% more than in the same month a year earlier. By value this was £2.3bn of lending in the month, 21.1% up on the same period last year.
Jackie Bennett, director of mortgages at UK Finance, said: “Purchases in the buy-to-let market continue to be constrained by recent regulatory and tax changes, the full impact of which have yet to be fully felt.”