Pound coins on desk

Is the buy-to-let boom over yet or not?

The buy-to-let market continues to grow with lending in this sector up 40% since 2008, according to the Bank of England’s Financial Stability Committee (FPC).  Over the same period, owner occupier mortgage lending has risen just 2%.

In a recent statement the FPC expressed concerns that the growing buy-to-let property market in the UK could post a threat to wider financial stability, having the potential to “amplify” a housing boom and bust.

“The FPC is alert to the rapid growth of the market and potential developments in underwriting standards,” the committee said.  “As the market continues to grow, particularly if driven by loosening of underwriting standards, the sector could pose risks to broader financial stability, both through credit risk to banks and the amplification of movements in the housing market.”

The Bank said that buy-to-let landlords were more likely to sell if there was a significant drop in house prices, accelerating the dive in property values further.  A similar amplified effect could occur should prices go up sharply.  “Any increase in buy-to-let activity in an upswing could add further pressure to house prices. This could prompt owner-occupier buyers to take on even larger loans, thereby increasing overall risks to financial stability,” the FPC said.

So it appears that the buy-to-let boom is far from over yet but there are risks of sharp increases or decreases ahead.  If you have any concerns about your buy-to-let portfolio and want any advice about capitalising on existing high prices to release equity from some of your properties then please contact us on 01252 819725 or email us at info@check4houses.co.uk.  We can sell your property from as little as 0.5% or £499+VAT, putting more of your equity in your pocket.