Buy-to-let investment will remain strong in the future, as the private rental sector continues to be a fundamental part of the housing market, according to specialist lender Paragon Mortgages.
Although the buy-to-let sector has taken some financial hits lately, tenant demand is continuing to rise, highlighting the importance of property investment in the UK.
The Managing Director of the leading buy-to-let lender, John Heron, insists that the private rental sector is still vital to today’s housing market, despite uncertainties for landlords following recent regulatory and fiscal changes.
“We have every confidence in the buy-to-let market, with tenant demand continuing to remain high and in some areas increasing, the private rental sector will remain a fundamental part of the UK’s housing market now and in the future,” he insists.
Paragon’s buy-to-let lending soared by a huge 84.5% over the six months ending 31st March 2016 in comparison to the same period last year, rising from a total of £446.2m to £823.6m.
The firm believes that the surge is partly due to a rush of landlords looking to beat the 1st April Stamp Duty deadline.
As of 1st April, buy-to-let landlords and second homebuyers are now charged an additional 3% in Stamp Duty. Our guide will help you understand how the change will affect you: https://www.justlandlords.co.uk/news/landlords-guide-stamp-duty-surcharge/
However, Paragon’s sharp increase in lending also reflects that market fundamentals remain strong, despite various regulatory, legislative and fiscal developments that have created uncertainty over the future of the buy-to-let sector.
Heron explains: “Demand for private rented property remains strong, regardless of the significant policy developments we have seen in recent months. The Prudential Regulation Authority’s proposals, currently in consultation, will introduce a level of discipline to the market that we welcome and, in particular, require that more complex business is subject to an appropriately robust commercial assessment, similar to that which Paragon already applies to more complex business. Paragon is therefore well positioned to deliver solutions for landlords through a period of significant change in the market.”
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