Activity in the buy-to-let market dropped further in July as a result of government interventions and a wider housing slowdown, new mortgage lending figures show.
Remortgages have continued to drive lending which, owed in part to increased interest rates and sustained uncertainty deterring homeowners from selling and moving, according to the latest data and analysis from UK Finance, but the figures also reveal a further decline in buy-to-let lending.
Suchit Sethi, the founder of cashbackremortgages.co.uk, said: “It is little surprise that the residential remortgaging market had the strongest July in a decade, as savvy homeowners looked to lock in the best rate ahead of August’s interest rate rise.”
But the fact that new homeowner mortgages are down again compared to last year paints a “concerning picture of the state of the UK housing market”, according to Sethi.
He added: “Buy-to-let mortgages are also down, further evidence that the government’s tax changes have led to the sledgehammering of the BTL industry - arguably perpetuating the housing crisis at the worst possible time.
“The crucial question is will we see any kind of recovery in the housing market before the country gets real clarity over Brexit? Seeing as that might not come until late March, the situation could be grave.”
With tax and regulation changes continuing to have an adverse impact on the buy-to-let market, separate data provided by the Bank of England also shows that the value of mortgages taken out by landlords is falling.