It’s fair to say that the buy-to-let (BTL) market in Britain is going through a transformational phase, possibly the biggest in its history.
Over the past 12 months, changes to tax relief for BTL landlords and the new stamp duty levy on investment properties – announced in the 2015 summer Budget – have become a reality. What’s more, Brexit and the general election – as well as affordability changes proposed by the PRA – have added a further layer of uncertainty to an already complex BTL landscape. Since April 2016, Metro Bank has seen a significant increase in both amateur and professional investors looking to own properties and borrow through incorporated entities – typically limited companies – as the restriction on interest relief does not apply to limited companies.
In key property hotspots and commuter towns, we continue to see demand for properties outstrip supply. However, the easing of permitted development rights has resulted in additional properties entering the rental and first-time buyer markets. According to the Halifax Price Index, overall UK house price growth has stalled recently (average house prices across the country actually fell by 0.2% in the three months to April 2017 – the first quarterly fall since 2012) and with the added constraints of stricter affordability criteria and housing market activity, prices are likely to be weighed down somewhat over the coming quarters. However, this should feed through into improved demand in the rental sector, as occupiers gravitate towards renting rather than buying – another potential opportunity for portfolio landlords to expand.
At Metro Bank, we have responded to these changes by refreshing our professional BTL range to meet the needs of an even broader range of customer – from a first-time, single-property investor to a professional landlord with a portfolio of rental properties. Our loans are available to individuals as well as limited companies and through our dedicated relationship management and individual underwriting approach, we remain strongly committed to this sector and keen to support both existing and potential customers with their borrowing requirements.
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