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Nationwide: Tax relief cuts ‘will not dampen buy-to-let’

The Chancellor’s move to curb tax relief on buy-to-let mortgages is unlikely to dampen activity in the sector, Nationwide Building Society’s senior economist has forecast.

George Osborne’s decision to begin tapering down tax relief for buy-to-let borrowers to the basic rate starting in April 2017, will not deter landlords from investing in retail properties according to Nationwide’s Stefano Silvestrin.

Speaking at the Financial Services Expo in London yesterday, Silvestrin said the decision to cut the tax relief higher-rate taxpayers could claim down to a basic rate level over the next four years might however have a ‘dampening’ impact. “Activity [in the buy-to-let market] will not be as high as it would have been if this measure had not been introduced,” he says. “But we don’t think it will have a major impact.”

He says it is likely that the buy-to-let market will continue along its current path with “modest growth” as the “risk perception” around buy-to-let has dropped for lenders, which is why there is more activity and competition.

Further regulation of the sector is however looking likely, he warns. Silvestrin believes that the financial regulators could act further in the buy-to-let space if they believe that lending levels are getting too high and the sector is securing too great a proportion of total lending.

“If they [the regulators] do anything, it will be around increasing the rental cover ratio required and increasing stress test levels on buy-to-loans,” he says. “[Buy-to-let] is likely to become more regulated.”



Analysis: Beat comparison sites at their own game

On noting the return of the famously irritating opera singer featured in the advertising campaign of a well-known comparison website, I wondered why such sites go to the trouble of advertising when often they seem to get a helping hand from the consumer press.  Indeed, in recent weeks both Which? and a prominent current affairs […]


Mortgage rates fall to lowest level on record

Mortgage rates are continuing to fall and are now at their lowest level ever, figures from the Bank of England and FCA show. According to the latest Mortgage Lenders and Administrators Statistics, the overall average interest rate on gross advances decreased by 16 basis points to 2.83 per cent between the first and second quarters […]


Aegon to quit ABI

Aegon is to leave the Association of British Insurers at the end of the year in a bid to lobby “direct to the Government and regulators”. It follows Legal & General which quit the insurers’ trade body last year, believing it could lobby more effectively alone. Aegon chief executive Adrian Grace says: “Aegon has enjoyed […]


Aldermore loosens bridging criteria

Aldermore has loosened its bridging criteria by reducing its minimum valuation for light refurbishment from £100,000 to £75,000. The move brings its bridging offering in line with its buy-to-let range. In addition, the lender has reduced the minimum age for those qualifying from 25 to 21, except if the applicant is a first-time landlord. It […]

Partied out and penniless

December has left me destitute. My piggy bank lies broken and empty, my lunchtime meal deal feels like an extravagant expense and I’m down to the Bountys in my box of Celebrations. But I won’t mourn my dearly departed pennies. Between buying gifts for loved ones (then deciding to keep them for myself) to treating […]


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