The Intermediary Mortgage Lenders Association has called for the government to “refrain” from imposing further costs on the buy-to-let market, as official figures confirm a protracted slowdown in the sector.
Their comments come as new Office of National Statistics figures show private rental prices in the UK grew by just 1.1 per cent in the 12 months to January 2018.
This is a fall on the 1.2 per cent annual growth seen in December 2017. The ONS says this market has been slowing down since the end of 2015.
The trend has been driven by a sluggish growth in London, where private rental prices have grown by just 0.2 per cent in the 12 months to January 2018. This is the lowest rate of growth in capital since October 2010.
In contrast, private rental prices increased by 15.6 per cent in the UK between January 2011 and January 2018, driven by the historical growth in private rental prices within London.
IMLA’s executive director Kate Davies says: “Today’s figures show that the buy-to-let sector is not immune from economic pressures: policy-makers should refrain from imposing further costs on the sector.
“As was highlighted in IMLA’s latest white paper on buy-to-let, there is evidence that recent intervention by the government and regulators – such as the rise in second home stamp duty and rental income tax changes – is having an impact on landlords and investors, leading them to take a more cautious approach.”
Davies adds: “The impact of these changes may take time to work through but will likely be felt over several more years.”
Other recent housing market figures have pointed to a significant slowdown in the buy-to-let sector. The Royal Institutions of Chartered Surveyors December 2017 Residential Market Survey reported that tenant demand continued to fall, albeit at a slower rate than the previous month.
This survey also showed new landlord instructions declined at a slightly faster rate.
Meanwhile the Association of Residential Letting Agencies reported in December, that the number of letting agents witnessing rent increases for tenants remained at the lowest level since January 2015, when the organisation started collating this data.
The ONS figures showed that in England private rental prices grew by 1.1 per cent; Wales saw growth of 1.4 per cent and Scotland saw rental prices increase by 0.3 per cent in the 12 months to January 2018.