Access to finance will not be the biggest challenge for landlords following the stamp duty hike and the implementation of the Mortgage Credit Directive, according to a buy-to-let lender.
Foundation Home Loans commercial director, Simon Bayley, said choosing where to buy property will be the most tricky aspect landlords will be faced with this year.
“Much doom and gloom has been expressed that the changes to tax relief and stamp duty will make it more difficult for landlords, particularly new and amateur landlords,” he said.
“But at a time when there is such choice of funding and the alacrity with which the industry has come up with potential new funding choices, like limited company buy-to-let products, funding is not really going to be the issue.”
Mr Bayley said landlords looking at acquisition will instead be working harder to find areas where property prices are not overinflated and can generate rental yields, which make sense.
“While the moves on restricting tax relief and increasing stamp duty will create some barriers to entry, they are not insurmountable and the main consideration for successful investment in 2016 will be the mantra of ‘location, location, location’.”
In January last year, HM Treasury published new rules which will embed European regulations on mortgage lending into UK law.
Industry experts said the 3 per cent tax on stamp duty for buy-to-let investors, which was announced by chancellor George Osborne last year and is to come into force from 1 April, is causing demand and property prices to soar.
Mr Bayley said first-time landlords might be thinking a “little more deeply” about involving themselves because of the changes, but funding “will not be the issue”.
“In reality, it will be about making sure the sums add up and that has everything to do with the geographical areas they choose to buy.
“The buy-to-let market will continue to be a very competitive one in 2016, which can only benefit landlords and their advisers and we will continue to champion first time landlords as we have since we launched.”
katherine.denham@ft.com
