Fortune favours the brave. The popular, often military, Latin-origin proverb may well be apt for those of us buying or managing property for let in the next year or so.

We’ve written extensively about changes in legislation which will force buy-to-let investors to consider their options when it comes to charges and lower levels of tax relief.

Figures from the end of last year suggested that the sell-off of property had commenced but perhaps hadn’t reached the levels suggested by the direst of predictions at the beginning of 2016. However just last week, further reporting by The Telegraph gave the clearest sign yet that this may indeed have been the tip of the iceberg.

Nationwide – the UK’s second largest lender of buy-to-let mortgages behind Lloyds Banking Group – have now released figures showing a decrease in their buy-to-let lending of £1.3bn in the 9 months to the end of December. Perhaps this was to be expected as the mutual was one of the first to introduce tighter lending criteria following the Government’s announcement of stricter tax regulation. That said; it remains a significant indicator of the market slowing.

But it’s not all doom and gloom (for landlords at least). Figures released in the second half of last year by The Royal Institute of Chartered Surveyors (RICS) suggest that by 2025 there will be 1.8 million more renters in the UK market than in 2016. This will put massive pressure on a market which is, ostensibly at least, shrinking. However, it will also put time honoured economics front and centre suggesting that, with demand outstripping supply, rental income can increase at pace.

Last week’s statement from Secretary of State for Communities & Local Government, MP Sajid Javid has placed the construction of new homes – where they will be effective – on the priorities list. Unfortunately, and by his own admission, the country would need to build between 225,000 and 275,000 house per year to meet demand and last year only 195,000 were introduced into housing stock.

And so, we return to the battle cry suggesting that those who hold their nerve will be the long-term winners. But perhaps the most important question is; how brave will be brave enough?

 

How do you feel about the buy-to-let market’s future? Do you think the Government’s latest white paper ‘Fixing Our Broken Housing Market’ goes far enough? Are the measures introduced last year counter-intuitive, making an already stretched rental market, even worse?

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