CML drops 2017 buy-to-let forecast to £35bn, £33bn in 2018

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The Council of Mortgage Lenders has downgraded its buy-to-let lending forecasts for 2017 and 2018 due to tax and regulatory burdens in the housing and mortgage markets.

Last week Mortgage Strategy broke the news that a downgrade was coming, but the CML had not drawn up final figures at the time.

The CML now expects buy-to-let lending of £35bn in 2017 and £33bn in 2018, a decrease from £38bn in each year, forecast in December last year.

CML director general Paul Smee says he is optimistic about remortgaging and first-time buyers driving lending in 2017 and beyond.

But he adds: “Buy-to-let had a weak start to 2017, and the sector’s contribution to overall net mortgage lending has fallen considerably over the last year.

“While falling mortgage interest rates have helped support borrowing, tax and prudential measures are exerting pressure on the buy-to-let market.

“Following the distortion of the stamp duty change on second properties last year, we expected a slight recovery in lending levels. However, this has not materialised, and we therefore have lowered our forecast for buy-to-let lending this year and next.”

Smee adds it is important the buy-to-let market has no further tax or regulatory shake-ups until the market has properly digested those already in play.

One 77 Mortgages managing director Alastair McKee says: “Buy-to-let remains on the back foot while first time buyers are very much on the front.

“It’s a black and white narrative that has been consistent throughout 2017 and is likely to continue for some time yet.”

SPF Private Clients chief executive Mark Harris says: “Landlords are being more cautious when it comes to expanding portfolios while others are considering whether incorporation is the sensible way forward.

“With further Prudential Regulation Authority guidelines set to be introduced in October, there are new challenges ahead for the sector and we are awaiting detail from lenders as to how they are going to deal with these.”