Tax relief changes will not have major impact on BTL activity says Nationwide's Silvestrin

16 September 2015

The changes announced by Chancellor George Osborne curbing tax relief on interest-only buy-to-let mortgages for landlords are unlikely to have a major impact on activity in the sector, according to Nationwide’s Senior Economist, Stefano Silvestrin.

Speaking at today’s Financial Services Expo (FSE) London, Silvestrin said the decision to cut the tax relief higher-rate taxpayers could claim down to a basic rate level over the next four years might however have a ‘dampening’ impact. “Activity [in the buy-to-let market] will not be as high as it would have been if this measure had not been introduced,” he said. “But we don’t think it will have a major impact.”

He said it was likely that the buy-to-let market would continue along its current path with “modest growth” but was also quick to highlight that the “risk perception” around buy-to-let has dropped for lenders, which is why there is more activity and competition.

Further regulation of the sector was however looking likely. Silvestrin said that the financial regulators could act further in the buy-to-let space if they believe that lending levels were getting too high and the sector was securing too great a proportion of total lending.

“If they [the regulators] do anything, it will be around increasing the rental cover ratio required and increasing stress test levels on buy-to-loans,” he said. “[Buy-to-let] is likely to become more regulated.”

FSE London is taking place today and tomorrow at Old Billingsgate in the heart of London’s Square Mile. Alongside the seminar sessions it will offer delegates access to a range of lenders, providers and distributors actively looking to build relationships with the adviser community. Over 70 exhibitors will appear including lenders such as Accord, Lloyds Banking Group, Halifax Intermediaries, Santander for Intermediaries, Skipton Building Society, Virgin Money, and many more.

Further details on Financial Services Expo London, including how to register, are now available at: www.financialservicesexpo.co.uk

If you are a member of the press and would like to attend Financial Services Expo London, please contact Rob Griffiths, Director of White Dragon Communications on: rob@whitedragoncomms.co.uk