Mortgages  

AMI brands political push against buy-to-let 'quite nasty'

AMI brands political push against buy-to-let 'quite nasty'

Policy makers have forced buy-to-let lending down a road that is "actually quite nasty", which means advisers are going to have to do more work than ever before to help their clients, according to the Association of Mortgage Intermediaries.

Robert Sinclair, chief executive of AMI, told delegates at the Financial Adviser buy-to-let masterclass in London yesterday (Wednesday 15 November) there was "too much change" going on in the buy-to-let market at the moment.

"This is complicated by many things", he said, citing regulations such as the Prudential Regulation Authority's recent changes to portfolio underwriting rules and the tougher tax environment being embedded into buy-to-let.

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"The problem we also have is there is no love for landlords politically. How did we get to this point, where so many of the politicians are landlords themselves, but they seem to be running down a road where they actually seem to want to do something quite nasty?

"Who is going to continue providing the homes if the government keeps killing the private landlord?

"The only way we get total affordability in this market is in driving down house prices 30 per cent to 40 per cent and that is not a situation in which lenders want to be, and which the government cannot afford. This 'love out' with buy-to-let has to end."

Fellow panellist Gary Haynes, national head of private client services for RSM, said committed landlords were set to suffer as a result of the rise in tax payments which have been imposed on the sector by successive governments.

He explained: "Tax policy is a big issue and we have been looking at the impact of these policy changes over the past few months. From next year, we think landlords may end up paying more in tax then they expected. 

"All buy-to-let landlords need to face the stark reality that they will be paying a high tax on their properties."

However, Martin Stewart, founder and director of London Money, said he could see why there was a strong political will to get back towards a "traditional mortgage market", which the UK "hasn't had for years now'.

According to Mr Stewart, politicians were pushing for a return to a residential mortgage market because - so he told delegates - there were too many amateur landlords "sucking properties out of the chain".

Speaking as part of a panel looking at the potential long-term effects of taxation, Brexit and interest rates on the buy-to-let market, Mr Stewart said: "Any monkey could have bought a property and made money out of it. And it's not hard to see why this has been the case in the past, which is why regulation has been brought in.

"People like the flexibility of renting and demographics have changed accordingly, but quite frankly, we have an unfair situation where the landlord is at both ends of the chain: he is both the asset owner and the rent charger."