“The private rental sector continues to face uncertainty as the impact of the government’s interventions in the treatment of buy-to-let funding continue to work through. For many landlords, the full economic impact will not be felt for some months yet and will affect individual landlords differently, according to the structure of their property portfolios. So it’s not surprising that this situation is having an effect on rents, with some stagnating and others rising as landlords continue to analyse and weigh up their options. While in London in particular, rents slightly decreased for the first time since September 2010.
“The loss of tax relief in particular has, inevitably, put pressure on landlord finances, prompting many to reconsider their investments. We are hearing claims that large numbers of landlords may decide to exit the market: it remains to be seen whether this materialises but, given the fall in new purchases by landlords, a significant reduction in properties available for private rent would clearly make life more difficult for tenants, with higher rents likely being charged on a diminishing supply of suitable properties.
“The government’s interventions were designed to re-calibrate the balance between private landlords and home owners. That balance has evidently changed – as illustrated by the cooling in the BTL market – but care must be taken to avoid a more dramatic shift, which could distort an essential element of the housing market.”
For further information please contact:
Lee Jones / Fran Hart / Amy Boekstein – Instinctif Partners
Tel: 0207 427 1400
Notes to Editors
The Intermediary Mortgage Lenders Association (IMLA) is the trade association that represents mortgage lenders who lend to UK consumers and businesses via the broker channel. Its membership of 41 banks, building societies and specialist lenders include 16 of the 20 largest UK mortgage lenders (measured by gross lending) and account for about 90% of mortgage lending (89.4% of balances and 90.6% of gross lending).