New research suggests that there is “significant demand” for buy-to-let mortgages across the UK, despite concerns that recent tax and regulatory changes are having a negative impact on buy-to-let investment.
In April 2017, HM Revenue & Customs (HMRC) unveiled changes to mortgage interest tax relief, which will slowly reduce landlords’ entitlement to claim tax deductible expenses for mortgage interest payments between now and 2020.
More recently, in September, the Prudential Regulation Authority (PRA) phased in regulatory changes for the mortgage market, which now see ‘portfolio landlords’ subjected to more in-depth vetting when applying for new mortgages.
Concerns have previously been raised that the above changes, coupled with the additional Stamp Duty Land Tax (SDLT) which landlords have been required to pay on ‘additional property’ purchases since April 2016, are deterring investors from the market.
However, new research from prominent lender Accord Mortgages suggests that many investors – including portfolio landlords – remain confident about their investments and are continuing to upsize their portfolios.
The lender says that there was “significant demand” for buy-to-let mortgages throughout 2017.
It adds that approximately 32 per cent of all buy-to-let mortgage applications came from landlords who own four or more properties – suggesting that many portfolio landlords remain unfazed by the PRA’s recent changes.
Accord’s data also reveals that buy-to-let remortgage activity was strong over the course of the year.
“We have seen a significant demand for buy-to-let mortgages from both experienced and first-time landlords this year,” said Chris Maggs, Commercial Manager at Accord.
“2017 was a year of remortgaging for landlords who reaped the benefit of some exceptional mortgage rates, and 2018 is likely to be no different.”