Welcome to the fourth edition of the half-yearly Buy to Let Britain report from Kent Reliance, looking at the trends in the private rented sector (PRS), and the Buy to Let mortgage market that supports it.
This edition comes at a time when the Buy to Let market is under pressure like never before. Two years on from our inaugural edition, both the PRS and the Buy to Let market now sit firmly in the sights of both politicians and regulators. Driven by a political agenda that prioritises home ownership and a view that Buy to Let is harmful to the UK’s housing market, property investors are seen as the scapegoats for the nation’s housing issues, whilst regulators are turning their attention to the lenders that support the market. This constant focus on managing demand does nothing to address the real issue, which remains the lack of supply of new housing. However, notwithstanding the various initiatives aimed at curbing Buy to Let, the reality is that the market, and the PRS that it supports are essential parts of our housing supply. It is unfortunate that this is not acknowledged by policy makers, whose actions will primarily affect the tenants who they are arguably aiming to support; the prospect of higher tax on Buy to Let is already pushing up rents.
This report follows one of the industry’s busiest ever periods, as property investors moved at breakneck speed to complete purchases ahead of a new stamp duty surcharge on second homes. But the full impact of recent tax and regulatory changes is still to come. Meanwhile, the measures announced in the Chancellor’s 2015 Summer Budget have changed the way in which landlords approach mortgage finance, and spurred large landlords into forming limited companies. As always, we have worked out the current size of the PRS and its value – and more importantly – we consider the rate at which it is growing, and how the changing tax and regulatory environment will affect its growth.