In reference to the warnings of brokers recommending pay-rate mortgages to landlord clients (FT Adviser, 6 May), most buy-to-let investors have realised the “game is up”, and there is no value in leveraging their portfolios any more due to the government tax changes.
Therefore those landlords with buy-to-let mortgages will soon start to slowly offload their properties as remortgaging becomes more difficult and the loss of tax relief starts to bite.
This is very good news for first-time buyers as there should be a tsunami of buy-to-let properties coming onto the market in 2017/18 onwards for a number of years. If buy-to-let investors have not got the message by now, they are being very slow in realising that the longer they keep their properties, the greater will be their loss of equity.
We have not seen a major property freeze in London and the south-east since the late 1980s and early 1990s, so we are overdue a correction, particularly in these two areas.
May of these first-time buyers will become landlords using the rent-a-room relief to help with their mortgage costs, so rents will not spiral out of control. It is a virtuous circle and the prime minister and government must be congratulated on their bold move to help first-time buyers get onto the housing ladder.
Colin Cloy
Director
Pendulum Wealth Management, Horsham, West Sussex
