New data from Connells Survey & Valuation suggests that the buy to let mortgage sector is struggling under the weight of legislative changes, with buy-to-let sales plummeting 64% year-on-year across England and Wales.
The study also highlighted that the amount of BTL valuations carried out for the sector:
- were down by 18.5% year-on-year;
- fell 6.1% month-on-month in October 2016.
Remortgages and First Time Buyers driving the sector
This is in stark contrast to the remortgaging sector, which, along with FTB mortgages, are driving the lending market with remortgage:
- valuations in November rising 4.9% compared to October 2016 (as well as a 6.6% increase compared to the same period last year);
- an overall 24.6% increase on an annual basis.
The First Time Buyer (FTB) sector also saw a 1.8% month-on-month increase in the number of valuations carried out in November plus an overall increase of 13.1% year-on-year.
Why is the BTL sector struggling?
Industry commentators suggest that the raft of legislative changes that landlords have been subjected to over the past few years has made reinvesting or investing in the BTL sector not as attractive as it used to be.
These include the removal of the 10% wear and tear allowance, the decision to ban lettings fees in England, the extra 3% stamp duty land tax on additional homes, changes to lending criteria and the information required when applying for a BTL mortgage next year, and the phasing out of mortgage tax relief from April 2017.