14^th Oct 2018

Recent mortgage lending figures show that new buy-to-let mortgages dropped once again in July mainly due to the government's attacks on landlord investors; there has also been a fall in the housing stock activity.

However remortgaging is still 'fuelling' lending as the main reasons are the increase in interest rates and the economic uncertainty putting off new potential homeowners from taking out a mortgage, and many owners are not confident in selling their properties to move elsewhere.

Suchit Sethi, the founder of a company that specialises in remortgages, and custom mortgages, said: “It is little surprise that the residential remortgaging market had the strongest July in a decade, as savvy homeowners looked to lock in the best rate ahead of August’s interest rate rise.”

He is very concerned by the drop in new homeowner mortgages when compared to last year's July's, and described this as a “concerning picture of the state of the UK housing market”.

He explained further: “Buy-to-let mortgages are also down, further evidence that the government’s tax changes have led to the sledge hammering of the BTL industry - arguably perpetuating the housing crisis at the worst possible time.

“The crucial question is will we see any kind of recovery in the housing market before the country gets real clarity over Brexit? Seeing as that might not come until late March, the situation could be grave.”

The new BTL legislation, the changed HMO licencing, stamp duty, Right to Rent and reduction on tax allowances for mortgage interest have had a cataclysmic effect on the buy-to-let market. The Bank of England supports this as its data shows that the value of mortgages taken out by landlords is consistently dropping.

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