Buy-to-let lending will fall by 15-20% to around £33bn in 2018, Mortgages for Business managing director David Whittaker predicted yesterday.
Whittaker, who was speaking at the Mortgage Business Expo in the Barbican Centre, London, reckoned the market will be dampened down by the raft of changes coming to the buy-to-let market including the Prudential Regulatory Authority’s affordability stress tests.
Intermediaries should try to get deals done before Christmas in case landlords take fright, Whittaker said, as the PRA changes will significantly restrict the size of loans landlords are able to take out.
He forecast the market will reach £39bn in 2017 and £33bn in 2018, pouring scorn on lending predictions from the Intermediary Mortgage Lenders Association.
Council of Mortgage Lenders figures show that lending in 2015 reached £37.9bn.
Whittaker said: “I do not recognise this figure from IMLA that next year £48bn of buy-to-let mortgages will be loaned.
“Our view is it’s going to peak this year and it’s going to start coming down.
“And in 2018 we think the market will contract by 15-20% as landlords take fright, worry about the advice they are getting, and lenders do not transition comfortably from just doing vanilla buy-to-lets to limited company buy-to-let, because that’s where most landlords want to be and we are still trying to absorb what the regulator has imposed on us from the 1st October next year.”