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BTL mortgage market growth of 50 per cent predicted to slow

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The buy-to-let market grew nearly 50 per cent in the past year, according to the latest IRESS survey, although growth is predicted to slow as tax changes in the sector take effect.

Further findings of the Mortgage Efficiency Survey 2016 revealed that first-time buyer growth was negligent, up just 0.7 per cent, while home mover mortgages fell by 5.6 per cent.

It was revealed that the intermediary channel continues to see the lion’s share of the mortgage market, with 82 per cent of sales now going through this channel and almost three quarters (70 per cent) of lenders experiencing an increase in the number of applications submitted by brokers over the last year.

The direct channel continued to decline across branch and telephony, although sales via the internet increased, albeit from a low base. The internet channel remains a relatively small part of distribution, but as new digital entrants and so called “digital” brokers enter the market, this channel could double in the next 18 to 24 months.

IRESS principle mortgage consultant Henry Woodcock says: “The most significant finding in the survey is the continued rise of the buy to let market. This sector has increased by more than 213 per cent over the five years since the first IRESS Mortgage Efficiency Survey, but with the recent change of taxation around investment purchases for landlords, it seems unlikely that this stellar growth will continue.

“In the last year, loans to first time buyers have been fairly flat, suggesting that despite government incentives and innovative products offered by lenders, the struggle to get on the housing ladder remains a significant challenge.”

The survey results show that the impact of the Mortgage Market Review (MMR) is still apparent, with average number of days to offer, a key measure of efficient customer service, significantly higher than pre MMR levels, although there has been a slight improvement over last year.

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