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The Buy to Let Britain Report Edition five

Changes to the market take effect

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2016 had seen a prolonged period of uncertainty and breakneck change for the sector. The first quarter of 2016 was one of the busiest ever for the BTL market, as investors hurried to complete purchases before an additional 3% stamp duty levy for second homes came into effect.

This edition tracked what happened since – a period that was not without incident. In the preceding six months, the BTL market tried to find its ‘new normal’ and the industry faced yet further intervention in the form of the Prudential Regulation Authority’s (PRA) recommendations for Buy to Let underwriting. Meanwhile, investors had longer to digest and react to recent tax changes due to be introduced from April 2017 – all against the backdrop of the referendum vote and the economic and political disturbance it has brought.

The raft of measures on the radar for the BTL sector were in part aimed at improving home ownership levels, so it is ironic that they seemed likely to achieve the opposite, with even greater upward pressure on rents, combined with the prospect of declining real incomes, likely to stretch affordability measures even further. In this context, we looked at how landlords and lenders alike were reacting to the successive blows of taxation and regulatory change, as the PRS remained firmly placed in the political crosshairs.

We examined how landlords reacted to the increasing cost of running their business, the knock on impact of higher rents for tenants, not to mention the rocketing popularity of investors securing finance through limited companies.

We also calculated the size of the private rented sector and its value, analyseing the rate at which it was growing, and the returns landlords were seeing.

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