IMLA blame 80% decrease in BTL investment on government policies

by Property 118

11:59 AM, 7th February 2018
About 10 months ago

IMLA blame 80% decrease in BTL investment on government policies

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IMLA blame 80% decrease in BTL investment on government policies

Intermediary Mortgage Lenders Association (IMLA) figures show that Buy to Let investment has fallen by 80% since the 2015 Summer Budget Section 24 mortgage interest relief restrictions were announced.

IMLA figures indicate net investment in new properties by Buy to Let landlords fell from £25 billion in 2015 to only £5 billion last year.

IMLA are blaming the cumulative layered effect of government policy against private landlords including Stamp Duty surcharges for second homes and increased regulatory responsibilities. They argue that Buy to Let has had a positive effect on the Private Rental Sector with a total investment by landlords of £289 billion into the market since the year 2000.

Kate Davies, IMLA executive director said: “The raft of regulatory and tax changes that have hit the Buy to Let market in the last year have far reaching effects that are still yet to be fully realised.

“We know that the majority of people regard owner occupation as the tenure of choice, but for many this is not an immediate option. We also know that those who would in the past have rented from their local authority or Housing Association now need to rent privately. We urge the government to reassess the impact of the recent far reaching regulatory changes to Buy to Let investment and allow a period of policy consolidation.

“Various interventions by government have apparently been aimed at encouraging more first time buyers and making investment in Buy to Let less attractive to existing and potential landlords, but the PRS plays a vital role in our housing supply and it’s essential that a sensible balance is struck, if tenants are not to be disadvantaged by shrinking stock and higher rents.”

“Our nation’s private rental sector investors provide a vital service that’s vital to millions of UK tenants. We need to support and protect a sector that does so much for so many.”

After adjusting for inflation, IMLA analysis shows a 4.4% fall in rental costs in real terms between 2005 and 2017.

The Intermediary Mortgage Lenders Association (IMLA) is the trade association that represents the views and interests of UK mortgage lenders involved in the generation of mortgage business via professional financial intermediaries. Its members include the intermediary-based arms of banks and building societies and a range of specialist lenders who are entirely intermediary-based in terms of their sales distribution channel.



Comments

money manager

12:33 PM, 7th February 2018
About 10 months ago

There are 391 apartments in our development with a healthy mix of tenures including tenants moving to home occ. We know of many sales and although the majority have been to other, often foreign, investors many have moved into owner occupation. In just our block and to our own knowledge, the available rental pool has dropped by about 5%, continued rental demand is strong; rents?

Rob Thomas

12:42 PM, 7th February 2018
About 10 months ago

As the author of the above mentioned report I'd like to thank you for running the story.

However, just one small correction - above you say "IMLA figures indicate Buy to Let lending in 2015 totalled £35 billion and last year this fell to only £5 billion." The report actually says that net investment in new properties by buy-to-let landlords fell from £25 billion in 2015 to £5 billion in 2017." Obviously, this isn't the same thing as buy-to-let lending.

Rob Thomas

Old Mrs Landlord

12:52 PM, 7th February 2018
About 10 months ago

Reply to the comment left by money manager at 07/02/2018 - 12:33
The report of this on Property Industry Eye has a number of comments from letting agents all giving figures far in excess of 5% for landlords instructing them to put properties up for sale as tenancies end. Obviously there will be regional variations and I should imagine many landlords who use managing agents are in full-time employment so most likely to be affected by S.24.

Dr Rosalind Beck

13:42 PM, 7th February 2018
About 10 months ago

A 4.4% reduction in rents in real terms and yet the likes of Shelter continue to make ridiculous statements about 'soaring rents.' This will be a useful piece of research to point them to whenever this nonsense is spouted. I am banned from their FB page so would appreciate it if others could point them to this.

Neil Patterson

13:49 PM, 7th February 2018
About 10 months ago

Reply to the comment left by Rob Thomas at 07/02/2018 - 12:42
Thank you very much Rob and correction made 🙂

Ali Asgur

23:20 PM, 7th February 2018
About 10 months ago

I don't think 'blame' is quite the right word if the Government's policy is having the exact effect they intended.

Gary Dully

8:50 AM, 9th February 2018
About 10 months ago

I tend to house some of the most unpleasant people our society has to offer.
I am currently evaluating all of my properties and those not performing are going to be sold off and my tenants will be dumped onto waiting lists for council houses that no longer exist.
The BTL market is now in deep trouble, It’s like watching a train crash in slow motion.
Section 24 isn’t fully implemented yet and we now have restrictions on lending via the horrendous red tape in obtaining a simple BTL mortgage.
Today I’m in West Yorkshire and I will be looking at selling off, a property there.
It has been wrecked twice by the tenants, who are now on a housing list, now evicted, unemployed and claiming every benefit they can get their grubby little hands on.
It’s not making enough money and probably has a bit of equity in it.
That’s another one that won’t be replaced.
That household have to be housed somewhere, it’s the law!
But it won’t be by me.
My letting agent says that there are many landlords now selling up and the rents are now rising at the request of remaining landlords.
They deal with the pleasant tenants, not the social misfits that I deal with, so for them to be worried, things must be bad.
For example, Liverpool are now cracking down into the HMO market with new proposed article 4 directives, with one aim in mind, which is to kill off the independent HMO landlord to try and fill the expensive chrome and glass student accommodation with as many people as they can.
I would suggest that they reconsider that idea and fast.
They have given planning permission for a market that doesn’t yet exist of over 88,000 student roooms.
What about families, seperated couples etc?
They will eventually become monuments of failure, they will be turned into wrecks by the scum I currently house.
I passed Byrom Point yesterday, just outside the Mersey Tunnel, the doors were filthy and it’s already looking grubby, from the outside.
It only opened last year.
There are now more being built and they will end up failing.
The ones not full will have space bought by the councils and they will mix some of these nutters with normal tenants.
That will mean gang rapes, drugs and beatings for anybody that gets in the way of their drug habit.
They haven’t evaporated into outer space, you politicians are idiots!
they still have to be housed!
This government and local councils haven’t got a bloody clue, they are attacking the people that bring choice, peace and tranquility to the rest of the housing market.
But I’m not the type of person that gives up on residual income.
I will probably move on to commercial, where if you don’t pay the rent, I can evict in weeks, as opposed to months in the residential market.
My attitude used to be that I provided a much needed service, I now feel that I am a victim of every moronic politician, stuffed into the Houses of Parliament and Town Hall.
Hey if you don’t want my investment money, that’s fine Mrs May, I can and will find a home for it elsewhere, you can now house the scum of the Earth and the taxpayer can foot the bill, you can eventually vilify the corporates and watch them leave the market in 10 years time, as their chrome and glass tower blocks turn into concentrated drug dens.
Corporates have no interest in being a social service and will make you pay for whatever you ask for, with a big fat invoice.
You had someone who housed some of the most ghastly tenants, ex offenders, arsonists, paedophilic scumbags and professors in lying through their teeth, you would never want to meet, spread out, buried amongst normal, pleasant folk, out of sight, out of mind, but you decided to attack my business and I will now move on to pastures new.
So watch out any remaining landlords, you have some of the most cringeworthy, scum in the tenant market, coming to a town near you and they are not very nice people.

Dr Rosalind Beck

8:58 AM, 9th February 2018
About 10 months ago

Reply to the comment left by Gary Dully at 09/02/2018 - 08:50
I agree, Gary, that these tower blocks will in the future be used to house the 'lowest' end of the market. And I agree that the Government has behaved in a moronic way, promoting these whilst constantly engaging in a populist attack against those of us who provide an essential service to 5 million households. Every landlord who can will move away from the lower end of the market.

Sami Houmrani

17:19 PM, 9th February 2018
About 10 months ago

Our nation’s private rental sector investors provide a vital service that’s vital to millions of UK tenants. We need to support and protect a sector that does so much for so many.

H B

10:02 AM, 10th February 2018
About 10 months ago

An 80% reduction means 80% fewer homes that could have been provided to the market and more people who are otherwise homeless or in unsatisfactory housing. Why doesn't the government get it?

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