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Targeting Buy-to-Let Landlords 2018: Market Trends Report

  • ID: 4577948
  • Report
  • Region: Global
  • 44 Pages
  • IRN Research
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FEATURED COMPANIES

  • Barclays Group
  • Birmingham Midshires
  • Coventry Building Society
  • Lloyds Banking Group
  • NatWest
  • Paragon Banking Group
  • MORE

Buy to let mortgage advances fall by more than 10% in 2017 as tax and legislative changes bite.

The recent legislative changes aimed at restricting the activities of BTL Landlords are now having a negative impact on the BTL mortgage market, with new home purchases by BTL landlords having slowed significantly. In 2017, the value of new BTL advances fell by 12.3% and the market is expected to stagnate with little real growth in 2018. Also, in 2017, the number of BTL mortgages taken out fell by 10.4%.

The recent tax changes and the threat of rising interest rates in the future have resulted in a growing tendency for BTL landlords to remortgage rather than take out loans for new property purchases. In 2018, almost three-quarters of the value of BTL mortgages will represent remortgaging and around seven-in-ten BTL mortgages that will be taken out will be for remortgaging purposes. At the end of 2017, BTL mortgage holders owed a combined amount of £202.4 billion, compared with £196.2 billion at the end of 2016. This is one of the slowest rises in amounts owed seen over 2007-2017, indicating high levels of loan repayment activity.

This report outlines the trends in the BTL mortgage market and discusses the market’s structure, market developments and drivers, the key mortgage providers, market size and trends and forecasts to 2020.

Note: Product cover images may vary from those shown
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FEATURED COMPANIES

  • Barclays Group
  • Birmingham Midshires
  • Coventry Building Society
  • Lloyds Banking Group
  • NatWest
  • Paragon Banking Group
  • MORE

1. Introduction

  • Abbreviations

2. Executive Summary

  • Industry Structure and the Main Market Participants
  • Market Developments and Drivers
  • Key Players
  • Market Size and Trends
  • The Future

3. Market Structure

  • Five key players
  • Not all BTL landlords are alike
  • Mortgage Lenders
  • Mortgage Brokers

4. Market Developments and Drivers

  • BTL landlords fill a gap left by the lack of housing supply
  • But are landlords pricing themselves out of the market?
  • The shine has come off the market as the Government and regulators put the boot in
  • Are BTL Landlords re-evaluating their investments?
  • With the returns on Vanilla BTL falling
  • Rising interest rates will reduce returns further
  • Most BTL landlords are not full-time professional landlords
  • Childless couples the prime target for BTL landlords

5. The Key Players

  • Lloyds Banking Group - the largest BTL lender
  • Lloyds Banking Group/Birmingham Midshires
  • Nationwide Building Society/The Mortgage Works
  • Royal Bank of Scotland/NatWest
  • Barclays Group
  • Coventry Building Society
  • Paragon Banking Group
  • Santander

6. Market Size and Trends

  • Introduction
  • Over 2 million BLT investors
  • But a market which is now showing signs of stress
  • A market shifting towards remortgaging
  • Limited companies take around 10% of the market and it’s growing
  • FTBs now owe over £200 billion

7. The Future

  • An uncertain future
  • Forecast assumptions
  • The Forecast
  • Tenancies likely to grow in length
  • Technology to play a growing role in the market

8. Associations

List of Figures
Figure 1 The relationship of house prices to average earnings (September each year), England and Wales
Figure 2 The relative costs of buying vs renting a property, 2008-2017
Figure 3 Example of the tax changes (rental income of £12,000 and mortgage interest payments of £4,000)
Figure 4 The privately rented housing stock in Great Britain, 2000-2017
Figure 5 Annual average yield on BTL investment by type of property, 2014-2018
Figure 6 The annual percentage change in actual rents for housing 2012-2018
Figure 7 The annual percentage change in house prices 2012-2018
Figure 8 The growth in build to rent properties, 2017/18
Figure 9 The largest providers of BTL mortgages to BTL landlords by amounts of loans outstanding, end 2017
Figure 10  RBS BTL mortgage business, 2016-2017
Figure 11 The value of BTL mortgage market advances*, 2007-2018
Figure 12 The value and volume of BTL mortgage advances*, 2013-2018
Figure 13 The structure of mortgages advances by value, 2013-2018
Figure 14 The structure of mortgages advances by volume, 2013-2018
Figure 15 The percentage of BTL loans which are for property purchases, 2016-2018
Figure 16 The BTL mortgage* market balances outstanding (year-end), 2007-2018
Figure 17 Forecast of the BTL market (gross advances), 2017-2022
Figure 18 Forecast of the BTL market (number of mortgages), 2017-2022
Figure 19 The amounts outstanding on BTL mortgages, 2017-2022

Note: Product cover images may vary from those shown
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  • Barclays Group
  • Birmingham Midshires
  • Coventry Building Society
  • Lloyds Banking Group
  • NatWest
  • Nationwide Building Society
  • Paragon Banking Group
  • Royal Bank of Scotland
  • Santander
  • The Mortgage Works
Note: Product cover images may vary from those shown
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Note: Product cover images may vary from those shown
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