A new report was recently released on the BTL market looking at the overall impact of recent policy changes. The report was compiled by the Centre for Economics and Business Research for Shawbrook Bank. Below is a brief summary of the findings.
A brief recap of the buy-to-let market
Between 2011 and 2015 the number of BTL mortgages rose from 62,000 to 118,000, a figure last exceeded in 2007. The share
of households living in the PRS had been relatively stable for decades, varying between 9% and 11% from the 1980s to the early 2000s. In the past 15 years however, this share has doubled to over 20% in 2016-17 according to the latest data from the English Housing Survey as both the share of owner occupiers and households in social rent declined.
After this period of sustained growth following the financial crisis, the number of BTL mortgages for house purchases dropped in 2016 by 13%, followed by an even steeper fall of 27% recorded in 2017. This suggests that the various changes in the BTL sector have had a significant effect on demand for such properties.
“We are seeing a potential shift in strategy in the shape of investors and landlords holding stock rather than purchasing anything new, focusing instead on driving yield. A politically uncertain environment has exacerbated what is an already cooling market, and we have also seen a rise in the amount of development and bridging finance, with the investor profile moving to one geared more toward adding and creating value,” Shawbrook Bank stated.