Net investment in buy-to-let has slumped by 80 per cent in 24 months following the introduction of a raft of harsher tax treatments and tougher lending standards.
Stark figures from the Intermediary Mortgage Lenders Association show net investment in buy-to-let property fell from £25billion in 2015 to just £5billion in 2017 – a steeper drop than was seen immediately after the credit crunch in 2008.
It means the vast majority of landlords have been selling off existing properties and not replacing them with alternatives at the same value, not expanding their portfolios, and/or have been paying down their mortgages.
Landlords have been rapidly retrenching since April 2016 as the tapered removal of tax relief on their mortgage interest, a steep 3 per cent stamp duty surcharge and tougher mortgage rules have all hit their finances over the past two years.
Kate Davies, executive director at IMLA, said: ‘The raft of regulatory and tax changes that have hit the buy-to-let market recently have far-reaching effects that are still yet to be fully realised.