The Buy To Let Exodus?
Over the last few days I have seen a number of articles flying around noting that the buy to let market is still buoyant and actively growing. Now lets look at the figures that you really can’t argue with.
- There were 5,000 new buy-to-let house purchase mortgages completed in April 2018, some 5.7 per cent fewer than in the same month a year earlier. By value this was £0.7bn of lending in the month, 12.5%down year-on-year.
- There were 5,500 new buy-to-let home purchase mortgages completed in the month of May, some 9.8 per cent fewer than in the same month a year earlier. By value this was £0.7bn of lending in the month,22.2 per cent down year-on-year.
- There were 5,400 new buy-to-let (BTL) home purchase mortgages completed in the month, some 19.4 per cent fewer than in the same month a year earlier. By value this was £0.8bn of lending in the month,11.1 per cent down year-on-year. (source is UK finance, June 2018 figures.)
This screams out one clear obvious thing, the buy to let market is reducing. This is a decline of 15,900 transactions over a 3 month period, you would have to be extremely naive to bury your head in the sand and think the buy to let market is still as strong as it use to be. What’s also quite a coincidence is that first time buyer levels are at its highest in 10 years, now making up 51% of the purchase market, which is brilliant news.
Although there hasn’t been the mass exodus as a lot of headlines have been making out, I do believe an exodus will come for the amateur landlords of the market. When they realise there is more to be paid in tax than actual profit, it becomes logical to get rid. My advice to any landlord at the minute, would be to speak to a great advisor about your options now and in the future. Include your accountant within this conversation and work out the best strategy for your own individual scenario. The buy to let market has become a bit a of mine field with regards to borrowing money so its best to take advice. It can't be a bad thing though, first time buyers are now able to enter the market without ridiculous competition.
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