Mortgage brokers are positive about the health of the buy-to-let market but have concerns about the potential for growth in 2016, according to research by Natwest Intermediary Solutions.
From a survey of 441 intermediaries, 66 per cent said they had seen an increase in demand for buy-to-let mortgages from customers over the last six months, with just 7 per cent having experienced a decline.
A third expected to see a further increase in buy-to-let business, but four in 10 expected to see a decrease and just over a quarter expected it to remain stable.
Graham Felstead, head of Natwest’s intermediary arm, said it appears some of the uncertainty surrounding the interpretation of the new Mortgage Credit Directive, the new tax regime for landlords and the government’s focus on boosting home ownership has muted the optimism for further growth amongst a sizeable number of brokers.
He said: “We may well witness a ‘wait and see’ approach by many until the new factors bed in.”
In the Autumn Statement, chancellor George Osborne announced a new rate of stamp duty that will see buy-to-let investors and owners of second homes pay 3 per cent more from this April.
The government will also restrict mortgage interest relief on residential property to the basic rate of income tax from April 2017.
In terms of the types of customers brokers deal with, the survey found around a fifth of brokers do the majority of their buy-to-let business with professional landlords, while more than half only do a small amount or no business with the professional sector.
Another survey, published earlier this month by Shawbrook Bank, found brokers are most apprehensive about increased Financial Conduct Authority governance and further lending restrictions in the market, at 39 per cent and 26 per cent respectively.
They also raised concerns about the new stamp duty levy, with 80 per cent expecting the changes to impact negatively on the housing market.
Karen Bennett, sales and marketing director at Commercial Mortgages, said while it is obvious that 2016 will see some big changes in the buy-to-le market, it appears most brokers are not buying in to the commentary that the market will suffer.
“The majority of our broker partners are confident that the market is one in which their business can grow and buy-to-let presents many opportunities to investors,” she added.
