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Buy-to-let mortgage lending for house purchase falls way short of forecasts

The trade body for the mortgage sector has warned that buy-to-let purchase lending is set to come in at below its forecasts for 2018.

UK Finance had predicted £12bn of buy-to-let lending for house purchase this year, but Jackie Bennett, director of mortgages, has warned this is heading for around £9bn.

Speaking at UK Finance’s annual mortgage conference, she said: “Our forecast for 2018 was for around £12bn for buy-to-let purchase. The market looks like it will considerably undershoot this, coming in more around £9bn.

“This is undoubtedly the impact of the various tax, regulatory and legislative changes that have happened to landlords in the buy-to-let sector.

“With the 2018 tax bills dropping through landlords’ letterboxes, or more likely in their inboxes these days, we are yet to see what further impact this may have on the market.”

She was more positive about the overall mortgage market, predicting gross lending would hit a decade-high of £270bn this year.

Bennett also expressed caution about the growth of online mortgage brokers.

She said: “The Financial Conduct Authority  wants it to be easier for customers to understand the products they may be eligible for earlier in the process. This is a laudable aim.

“However, as customers have ever more complex circumstances – multiple incomes, self-employment, contracting to name but a few – it is more difficult for any ‘tool’ to narrow down the products available for a particular customer. Based on our conversations with lenders it would take several hundred questions to ensure that all bases were covered.

“That’s not to say that technology developments won’t help more standard customers – they will do and they are – but I think we have to be realistic about what proportion of the market can be served in this way.”

Source: Property Industry Eye

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UK Finance: Buy-to-let purchase activity well below expectations

Buy-to-let purchase lending will likely reach just £9bn this year – £3bn short of UK Finance’s £12bn forecast at the start of the year.

Jackie Bennett, director of mortgages at UK Finance, told delegates of the stark news at the trade body’s annual mortgage conference this morning.

She said: “Buy-to-let has not fared so well this year.

“Our forecast for 2018 was for around £12bn of buy-to-let purchase – the market looks like it will considerably undershoot this, coming in at more around £9bn.

“This is undoubtedly the impact of various tax, regulatory and legislative changes that have happened to landlords in the buy-to-let sector.

“And with the 2018 tax bills dropping through landlords’ letterboxes, or more likely in their inboxes these days, we are yet to see what further impact this may have on the market.”

She wasn’t all doom and gloom however.

Buy-to-let remortgaging has gone the other way, with lending likely to reach £27bn, up from the £24bn forecast at the start of the year.

Bennett also brought up the subject of product transfers in buy-to-let, as this data isn’t currently available, unlike with residential.

She said “it wouldn’t surprise me” if buy-to-let product transfers are “as strong as the residential market”.

Later in the day Yolande Barnes, professor of real estate, Bartlett Real Estate Institute, UCL, did little to quell fears about buy-to-let.

Indeed she said the market will likely be moderately down again on current levels come 2023.

Source: Mortgage Introducer