The amount invested in buy-to-let properties has crashed by 80% since 2015 according to new data from the Intermediary Mortgage Lenders Association (IMLA), with tax changes aimed at landlords supposedly to blame.
The amount invested in buy-to-let properties has crashed by 80% since 2015 according to new data from the Intermediary Mortgage Lenders Association (IMLA), with tax changes aimed at landlords supposedly to blame.
IMLA is the trade body for lenders who sell mortgages via brokers. Its report found that net investment in buy-to-let has plummeted from £35bn in 2015 to just £5bn last year.
The report pointed to a host of regulatory changes introduced by the government to make buy-to-let less attractive as the cause of this dramatic fall.
These changes include introducing additional stamp duty on the purchase of investment properties, removing the wear and tear allowance and stripping back mortgage interest tax relief, with IMLA arguing the sector had been the victim of “excessive regulatory intervention”.
The trade body suggested buy-to-let had had a positive effect overall on the private rented sector, with landlords investing around £289bn into the market since the turn of the century, bringing 1.8m properties into the rental market.
In addition, its research found that after adjusting for inflation rental costs had fallen in real terms by 4.4% between 2005 and 2017.
Kate Davies, executive director of IMLA, said that the “raft of regulatory and tax changes” introduced in the last year have far-reaching effects which are yet to be fully realised.
She added that while most people prefer to own their own home, for many this is not currently an option.
Davies continued: “Various interventions by government have apparently been aimed at encouraging more first-time buyers and making investment in buy-to-let less attractive to existing and potential landlords.
“But the PRS plays a vital role in our housing supply and it’s essential that a sensible balance is struck, if tenants are not to be disadvantaged by shrinking stock and higher rents.”
