Buy-to-let is nervous but stable

Robyn Ashman

September 21, 2016


The buy-to-let sector is in the midst of a bout of nervousness at the moment but the fundamentals of the market remain stable and should readjust following recent upheavals, according to Stephen Johnson of Shawbrook Bank. 

The Challenger Bank’s deputy CEO and managing director property said the market was in a period of flux following a number of changes introduced by the government.

He said: “The buy-to-let market is very difficult to gauge right now. It has been distorted by the changes to Stamp Duty at the end of Q2. But all in all the market is comparable to last year.”

Speaking at the Complete FS Expo in Southampton Johnson warned that the market was jittery, as are the government and future of buy-to-let.

“The market is difficult to compare at present and the data we have seen from the CML was poor,” he said. “All in all people are just nervous about buy-to-let right now.

“Brexit has had an impact on confidence but the big thing affecting the market is the tax changes that came in to place last Autumn.

“It was a very political move and the government was clearly scared of what buy-to-let could do to house price volatility.

“Also we are now going to see an environment where gearing for landlords is restricted and will be linked to yield. Some lenders have moved already and more will follow over the next year.”

But Johnson said the market is still in rude health and in a position to kick on once it has digested the changes it is currently undergoing.

He added: “The fundamentals of the buy-to-let sector remain solid. Yields are still stronger than can be found elsewhere and it will remain an attractive proposition to investors.”

Johnson was speaking at the Complete FS Expo which is currently taking place in Southampton.


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