From PrimeResi: 22 June 2016
The government’s tax tinkering has lit the fuse of a buy-to-let timebomb, which is set to blow in two to three years’ time, according to some pretty unsettling new predictions.
With Deutsche Bank’s warnings of an impending “major shock” still ringing in our ears, former financier and Maskells chief Charles Curran has analysed the likely effects of recent policy and regulatory changes combining with mortgage lending and tax issues, and concluded that many landlords will be “forced to exit the market”.
Buy-to-let landlords with a mortgage will see their costs increase “substantially” over the next four years, says Curran, while at the same time, the minimum 5.5% interest rate stress test proposed by the PRA will force many existing mortgage holders to remain with the same lender. For those who do choose to move, rates and LTVs “may make it impossible to refinance”.
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