FSE 2015: Buy-to-let not in real danger from tax relief changes
09-20-2015
The planned tax relief cuts on interest-only buy-to-let mortgages are not posing a real risk to the buy-to-let sector, Nationwide’s senior economist, Stefano Silvestrin, said in a speech at the Financial Services Expo (FSE) London yesterday.
regulation stampThe changes proposed by Chancellor George Osborne in the Summer Budget will affect activity somewhat but are not expected to have a "major impact", according to Silvestrin.
He said it was likely that the buy-to-let market would continue along its current path with “modest growth” but was also quick to highlight that the “risk perception” around buy-to-let has dropped for lenders, which is why there is more activity and competition.
Further regulation of the sector was however looking likely. Silvestrin said that the financial regulators could act further in the buy-to-let space if they believe that lending levels were getting too high and the sector was securing too great a proportion of total lending.
“If they [the regulators] do anything, it will be around increasing the rental cover ratio required and increasing stress test levels on buy-to-loans,” he said. “[Buy-to-let] is likely to become more regulated.”