The buy-to-let sector is set to continue declining until 2021, says a new report, which also forecasts a further price correction in the London housing market.
The number of buy-to-let mortgage approvals for purchase dropped in 2016 by 13%, followed by a drop of 27% last year.
The new report, compiled by the Centre for Economics and Business Research for Shawbrook Bank, says there will be further falls as the sector adjusts to a raft of tax changes and new regulation.
The bank says that government policies have had a marked effect.
It expects that the market will stabilise in 2021, which will be followed by returns to growth in the following two years.
Shawbrook expects that strong tenancy demand will continue, and that supply will be underpinned by professional landlords.
The report also says that London house prices could drop further.
It says: “London has long dominated the BTL sector.
“But a flat housing market and limited capacity for rental growth in the capital means that other places in the country offer better yields to investors, especially cities with large student populations.
“Brexit adds a further layer of uncertainty: with a number of City jobs at stake, London’s housing market might be in for a further price correction.”
I could of told Shawbrook Bank that for free. 😉
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Can’t see it coming back until the Government realise what a c**k they’ve made of housing, and reverse Sec.24 and the 3% SDLT.
Of course there’ll be a General Election (if there hasn’t been one before) which the Tories are all but guaranteed to lose. Labour will get in (maybe with McDonnell at the helm if Corbyn falls) and make matters worse for the PRS & Tenants with rent caps etc. That’ll take a year to enact, and 3 years for them realise what a mess they’ve made, and start unwinding things.
So 2026?
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” THREE ” ! More Years of Decline in BTL sector – How much less accommodation is going to result ? How many more families will be Homeless ? There’s not far to look for the reasons for this ; Sec 24, Licensing and HMO Minimum Room sizes – pretty much most of the Govt’s Housing policy. Hellooo Shelter, Gen R are you out there ?
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