Buy-to-let mortgage approvals are expected to fall for the next three years, a report by Shawbrook Bank and the Centre for Economics and Business Research has predicted.
Buy-to-let mortgage approvals fell by 13% in 2016 and 27% in 2017 – and the report anticipated more drops, albeit at a slower rate owing to a core of professional landlords in the market.
More positively, approvals are expected to stabilise in 2021 and increase in 2022 and 2023.
Policy interventions dampening the market include the 3% stamp duty surcharge, reduction in mortgage tax relief and stress tests from the Prudential Regulation Authority.
Karen Bennett (pictured), managing director for commercial mortgages, said: “Whilst the series of government and regulatory changes have had a significant impact on the sector, we have seen the impact felt more heavily amongst the “amateur” landlord community which has presented growth opportunities for professional investors.
“Recent political turbulence has had an amplifying effect on investor confidence but positively, the market remains buoyant for those with a long-term strategy who draw upon specialist advice to fully understand the impact of these policy shifts.
“Regulatory change that supports the public interest is not something to be afraid of, and we predict that this high performing asset class will remain a fundamental strength over the long-term provided lenders continue to adapt and change alongside it.”