A new report published by the Intermediary Mortgage Lenders Association (IMLA) has revealed that net investment in buy to let property has fallen from £25 billion in 2015 to just £5 billion in 2017 due to excessive regulatory intervention on the sector.
It is an 80% slump that is a steeper fall than after the financial crisis, according to the report ‘Buy to let: under pressure.’ IMLA is calling for a brake to be placed on further policy interventions on the UK’s private rented sector (PRS).
The report discusses the fact that buy to let has been positive for the private rented sector and it is estimated that between 2000 and 2017, buy to let landlords invested £289 billion into the sector. This type of investment has been fulfilling the rising tenant demand by bringing 1.8 million properties into the rental market.
IMLA also report that new tax and regulatory measures introduced in the last two years, for example a 3% stamp duty surcharge and the removal of higher rate tax relief on mortgage interest payments have deterred some landlords from confidently expanding their portfolios and in some instances has prompted others to exit the market.
The report states that there are currently 4.5 million people relying on the PRS in England alone. If the demand for rental property continues to increase at current rates, driven by a lack of social housing supply and inaccessibility to owner-occupation, IMLA’s report suggests that this will lead to upward pressure on rents, disadvantaging tenants in the sector.
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Statistics taken from ‘Buy to let under pressure.’