It is now two months since the UK took its historic decision to leave the European Union. Despite this, there has been no move to trigger Article 50, from which time Britain will have two years to negotiate its exit.
This has not stopped banks from attempting to cut buy-to-let lending, nor has it prevented pessimistic outlooks from the Treasury.
Need for concern?
Newcastle Building Society, Barclays and TSB have all recently announced that they are to cut buy-to-let lending because of Brexit fears.
The question is-should landlords and investors actually be overly concerned?
A new forecast from estate agency Countrywide has predicted that property prices will fall by just 1% across the country in 2017. The agency feels that not only Brexit but also stamp duty changes are the main causes of this estimated drop.
Peter Armistead, of Armistead Property, based in Manchester, feels that these reactions from banks are knee-jerk and should be taken lightly. He highlights the fact that no-one can currently be sure of the impact of Brexit on the housing market.
Pinch of salt
Mr Armistead noted, ‘it is worth taking all the scaremongering with a pinch of salt. While the future for the buy-to-let market looks certain, what is clear is that mortgage interest rates remain very attractive. Buy-to-let investors who are in a position to buy now could benefit for not only low mortgage rates, but lower property prices.’
‘The buy-to-let market is strong and continues to provide essential housing for a growing UK population. It is estimated that two million Britons are now private landlords, collectively renting out five million properties. With rising demand for rental property and a growing shortage of accommodation, the buy-to-let market will continue to give a good return on investment.’
What does the future hold for buy-to-let post Brexit?
Armistead observed that, ‘even before Brexit, the buy-to-let market was slowing, due to the new tax measures introduced by the Chancellor. Although the Government is trying to curb the buy-to-let market, property investment is robust in the long-term. However, lending may be further constrained and the banking industry may be hit harder in a few years.’
‘So far, figures from the Halifax and Nationwide show a slowdown from earlier in the year, when many investors rushed to get deals done before April. However, the market has not seen the type of falls that ‘Project Fear’ was predicting before the Referendum. The slowdown is pretty much in line with seasonal expectations following the bull market of January to April 2016. The market does not like uncertainty and we may have several years of this, along with potentially more issues to deal with,’ he concluded.