The number of new buy to let acquisitions has fallen dramatically following recent legislative changes affecting the private rented sector.
While landlords and letting agents had been warning these changes would negatively affect the sector, the scale of the impact is only starting to emerge, with the number of investors registering to buy new properties down 30% year on year.
The fall in new acquisitions comes after the Government introduced the Section 24 reforms to mortgage interest tax relief, which is being phased in between April of this year and 2021, increases to Stamp Duty on second homes and a cap on the deposits landlords can charge new tenants.
Responding to the figures, Paul Smith, CEO of Haart estate agents, described the current Government’s legacy on housing policy as a ‘disaster’.
He said; “Data from our own branches shows that the number of landlords registering to buy is down 30% on the year across England and Wales, and it is clear that far fewer landlords are investing in property.”
He warned that the fall in the number of people investing in buy to let property could have unforeseen consequences for the wider housing market.
He fears that, if it leads to a shortage of rental properties available, rents could go up which would make saving for a deposit much less affordable for young people trying to get on the property ladder.
He continued; “Affordability is clearly reaching a critical juncture as the average loan size increases whilst the average income decreases.
“Although rising first-time buyer borrowing demonstrates the appetite for home ownership in the UK, young people should not be left to stretch beyond their means, and Government should intervene with a tax break as a quick and straight-forward way to help them get onto the ladder.
“Theresa May’s legacy on home ownership has so far been a disaster. The ‘just about managing’ are further away from owning their own home than they ever have been, and the government’s feeble housing white paper did not go anywhere near enough to get housebuilders building and the market moving.”
If you’re a buy to let investor worried about the impact of recent reforms to the sector, such as Section 24 and Stamp Duty increases, are having on your finances, contact our expert team on 0161 222 4311 or online on landlorddebtadvisory.com.