After a "weak start" to 2017 for the UK buy-to-let sector, lenders are suggesting landlords should be spared any new tax and regulation changes.
In recent months, buy-to-let investors have faced a stamp duty surcharge, tax relief changes and stricter affordability checks, causing banks and building societies to predict a sharp fall in lending.
The Council of Mortgage Lenders (CML) said an expected recovery in lending to the sector had not appeared. It suggested that any impact these changes have had should be assessed before any new policies were designed.
CML General Director, Paul Smee, said: "Buy-to-let had a weak start to 2017, and the sector's contribution to overall net mortgage lending has fallen considerably over the last year,"
"While falling mortgage interest rates have helped support borrowing, tax and prudential measures are exerting pressure on the buy-to-let market. Following the distortion of the stamp duty change on second properties last year, we expected a slight recovery in lending levels. However, this has not materialised, and we therefore have lowered our forecast for buy-to-let lending this year and next.”
The CML had forecast originally that total buy-to-let lending would reach £38bn this year and the same amount in 2018, but it has now reduced the figure to £35bn in 2017 and £33bn in 2018.
"This re-emphasises the case for avoiding further changes to the tax and regulatory framework until the effect of these already in train have been properly assessed," Smee explained.
The CML forecast for mortgage lending as a whole stands at £248bn for 2017. However, it said the housing market had "stalled" in the past few months with monthly UK property sales static at around 100,000. Mortgage lending has remained relatively stable with interest rates remaining low.
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