There may have been some nervousness among landlords that the rental market would suffer as more tenants moved onto the housing ladder.
However, there is no evidence of this having dented the buy-to-let market, which remains strong, with the private rental sector now larger than the Local Authority housing sector.
Rental levels continue to increase, rising an average of 2.4% over 2013 according to Homelet’s rental index, albeit with significant regional variations in both average cost and market buoyancy. London rents are now 11% above the height of 2008 but the East Midlands is still 5% below, according to Belvoir Lettings.
Tenant affordability will eventually curb rises in certain regions, though the shortage of housing is not helping the situation.
Estate agents are reporting a shortage of re-sale properties coming onto the market, which is driving up house prices and rent. We need more houses to come onto the market to keep up with demand and to keep house price rises at a sustainable level.
The upcoming Mortgage Market Review is unlikely to impact on the buy-to-let market in my opinion. If the stories we are hearing from lenders that they are already geared up for MMR are true, there is no issue. But time will tell. The fact that buy-to-let is not regulated is not that material, as most lenders treat it as if it was regulated in terms of systems and processes.
New lenders are likely to enter the market over the next two years and they will inevitably look at buy-to-let. I welcome new entrants who will shake up the traditional lenders and challenge the market with innovative ways of doing business.
Charles Haresnape is managing director of mortgages at Aldermore