IMLA Says Buy to Let Investment Decline due to Regulatory Changes

The Intermediary Mortgage Lenders Association (IMLA) has found that ‘excessive regulatory intervention’ has led to investment in buy to let property plunging in 2017.

Investment in buy to let property fell from £35 billion in 2015 to just 5 billion last year. The IMLA has called for policymakers to fully assess the impact of recent changes before taking any further punitive action against the sector.

Between 2000 and 2017 the IMLA found that landlords invested £289 billion into the rental market. They argue that this had a positive effect on the rental market, with rental costs having fallen 4.4 per cent in real terms between 2005 and 2017.

However, the layers of increased regulatory policy over the past two years, ranging from the 3 per cent stamp duty surcharge to the removal of mortgage interest tax relief, has deterred some landlords from entering the buy to let market.

The IMLA added that if demand continues to increase at its current rate due to a lack of social housing and the difficulties accessing the property ladder, it could result in rising rents. This would then put further pressure on tenants.

IMLA executive director Kate Davies commented: ‘The raft of regulatory and tax changes that have hit the buy to let market in the last year have far-reaching effects that are still yet to be fully realised. We know that the majority of people regard owner-occupation as the tenure of choice, but for many this is not an immediate option. We also know that those who would in the past have rented from their local authority or Housing Association now need to rent privately.’

Davies concluded: ‘We urge the government to reassess the impact of the recent far-reaching regulatory changes to buy to let investment and allow a period of policy consolidation. Our nation’s private rental sector investors provide a vital service that’s vital to millions of UK tenants. We need to support and protect a sector that does so much for so many.’

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