Buy-to-let growth masks long-term uncertainty for specialist landlords

The rate of buy-to-let mortgages issued increased during the first quarter of 2016, despite measures by the government to limit such property arrangements.

A recent report from Paragon Mortgages found that 24% of the company’s business in Q1 2016 was based on buy-to-let sales, a marginal increase of 1% on Q4 2015. Even with this growth, the future of the buy-to-let market remains uncertain in the long-term.

The latest financial advisor confidence tracking report suggests that legislation announced as part of the Autumn Statement 2015 has dented confidence in the housing market. 50% of mortgage specialists expect demand for buy-to-let properties to fall in the near future, compared to 49% who believe the market will stagnate or potentially grow.

When surveyed, 23% of mortgage specialists asserted that tax relief changes would make ‘no difference’ to the buy-to-let market, compared to 23% in Q4 2015. This improving sense of buyer confidence has seen the rate of respondents who agree that specialist buy-to-let landlords will ‘keep current properties but not buy any more’ almost halve since the last quarter, down from 32% to 18%.

It remains to be seen exactly which way the market will go. However, the latest statistics suggest the environment is much more favourable than when Chancellor George Osborne first announced measures to adapt the existing buy-to-let model.

The most efficient way to mitigate for this level of uncertainty is to adopt a dynamic and fast-acting accounting method. Advanced accountancy software like Xero enables you to obtain a comprehensive overview of your finances in real-time, and to share this information with a professional accountant who can give you the guidance you need to make advantageous financial decisions.

Call on the experts at 3 Wise Bears today and get the support you need to ride-out turbulent times.