No more landlord tax changes CML urges Government
The Council of Mortgage Lenders (CML) has issued a plea to the Government to make no more private rental sector tax changes for the time being, as lending to landlords has fallen.
Landlords have battered by successive attacks over the last few years, including the 3 per cent stamp duty surcharge, changes to tax relief and stricter affordability checks on BTL finance.
The latest CML figures reveal the expected recovery in BTL lending has not happened, with lending to landlords still down, and the CML has cut its forecast for lending to the private rental sector.
CML director Paul Smee said: “Buy-to-let had a weak start to 2017, and the sector’s contribution to overall net mortgage lending has fallen considerably over the last year.
“While falling mortgage interest rates have helped support borrowing, tax and prudential measures are exerting pressure on the buy to let market.
“Following the distortion of the stamp duty change on second properties last year, we expected a slight recovery in lending levels.
“However, this has not materialised, and we therefore have lowered our forecast for buy to let lending this year and next.
“This re-emphasises the case for avoiding further changes to the tax and regulatory framework until the effect of these already in train have been properly assessed.”
The original forecast expected total buy-to-let lending to reach £38 billion in 2017, and the same figure for 2018. However, they have now cut their forecast to £35 billion for this year, and further cut the forecast for 2018 to £33 billion.
This follows total lending to the sector of £41 billion during 2016.
Mortgage lending overall remained stable and the CML forecast a total of £248 billion for 2017, despite the housing market stalling over the last few months.
Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “Landlords are being more cautious when it comes to expanding portfolios while others are considering whether incorporation is the sensible way forward.
“With further Prudential Regulation Authority (PRA) guidelines set to be introduced in October, there are new challenges ahead for the sector, and we are awaiting detail from lenders as to how they are going to deal with these.”