2015 was the peak for buy-to-let (Council of Mortgage Lenders)

The Council of Mortgage Lenders is “more pessimistic about the future than a year ago,” forecasting a continuation of “subdued” transactions levels across the country – and a particularly bleak time for the buy-to-let sector – over the next couple of years. Brexit-based uncertainty is likely to really hit home in the next 24 months, says the CML. That, combined with the recent suite of tax and regulatory changes in the housing and mortgage market, is going to have a detrimental affect on home moves and investors. But it’s far from a crash prediction… “The housing market is relatively well insulated from Brexit, compared with other parts of the economy, as most activity is driven domestically,” the Council notes, predicting that “given strong demand for housing, we still do not expect to see national house price falls over the next two years.” Buy-to-let – which has been something of a whipping boy for the government recently, with an additional SDLT levy already in play, the Prudential Regulation Authority’s stress tests coming in in January, and tax relief changes starting in April – is in for a tougher time than the mainstream market; “the trajectory for buy-to-let is weaker than we expected a year ago… Our forecasts imply 2015 was the peak for buy-to-let house purchase activity, with 2016 to 2018 all being weaker.” And supply is set to continue to be the underlying problem. The current rate of new-build properties is only expected to increase modestly, while the trend of few home-owners putting properties up for sale is not expected to reverse in the current climate, given high transaction costs and weak house price inflation.