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TODAY'S OTHER NEWS

Buy-to-let investors shrug off tax crackdown

Buy-to-let lending continued to race ahead of the mortgage market in September as investors ignore Chancellor George Osborne's forthcoming tax crackdown.

Investors drove large quarterly and annual increases both in the number of buy-to-let loans and amount borrowed.

The buoyant growth was seen across both new purchase and remortgage lending, and contrasted with a slight dip in residential purchase loans in September, according to latest Q3 figures from the CML.

September saw £1.5 billion of buy-to-let lending for purchases, up 7% on August and 36% year-on-year.

Buy-to-let remortgage business totalled £2.1 billion, up 11% over the month and 62% on September last year.

By contrast, home mover lending fell 4% in September to £6.8 billion, although it was still up 15% year-on-year. Remortgage lending leapt 19% to £5.1 billion as borrowers locked into cheap deals amid rising speculation over interest rates.

Paul Smee, director general of the CML, said: “The growth in buy-to-let lending largely continues to reflect its more belated recovery from recession.”

Andrew Turner, director at lender Commercial Trust, said: “Buy-to-let is continuing to show real improvement, growing far more quickly than any other type of lending and continuing its trend of being the strongest UK mortgage market in the years since the recession.

“If the past few years have shown us anything, it is that buy-to-let has been the biggest driver of the housing market recovery.”

Charles Haresnape, group managing director, mortgages, at Aldermore said landlords were shrugging off Osborne’s tax relief crackdown. “The sustained increases in buy-to-let lending demonstrate the limited impact of the recent tax changes, and points to continuing strong growth for the remainder of this year and into 2016.”

Steve Bolton, founder of Platinum Property Partners, said the number of rental properties may decline once the Chancellor's changes come into effect, as some landlords face becoming unprofitable. “Those affected by the changes may also be forced to increase rents to stay in the black.

"Neither reduced supply of rental properties or more expensive rents is likely to achieve the ultimate aim of improving homeownership levels.”

Brian Murphy, head of lending at Mortgage Advice Bureau (MAB), welcomed the resurgence in residential remortgages. “While the Bank of England recently announced that the low interest rates could be in place for longer than expected, many homeowners still stand to save by moving to a more competitive deal, particularly those who are on their lender’s standard variable rate."

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