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IMLA predicts BTL sector to hit £48bn by 2017

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  • 15/02/2016
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IMLA predicts BTL sector to hit £48bn by 2017
Gross lending in buy to let for 2016 is forecast to reach £43bn rising to £48bn in 2017.

The report outlined an increase in the share of total mortgage lending to 17.9% this year up from 17.7% in 2015. This is forecast to rise further in 2017 reaching 18.3%.

The Intermediary Mortgage Lenders Association (IMLA) set out its predictions in a report, The new ‘normal’ – prospects for 2016, looking at the economic factors which would affect housing and lending over the coming years.

The report reads: “…tax measures introduced in 2015 aimed at landlords are likely to be insufficient to reverse the growth of the sector against the background of strong tenant demand.

“While these changes are likely to slow the growth of buy-to-let lending for house purchase, they could actually stimulate higher buy-to-let remortgage activity as the restriction on the deduction of mortgage interest will increase borrowers’ incentive to seek out lower mortgage rates. As a result, our forecast for buy-to-let lending … sees the total continuing to rise in 2016 and 2017.”

Buy to let enjoyed a strong year in 2015 and despite the tax changes set to hit landlords in April, IMLA expects the sector to remain resilient. In the year to November gross buy-to-let lending reached £34.8bn, 40% above the same period in 2014. While the association warned growth in the sector would slow sharply this year, remortgaging activity and the momentum provided by an expanding private rental sector will have positive effects on lending and market share.

 

The mortgage sector overall looks set for another year of growth as gross mortgage lending is forecast to rise to £240bn this year up from Council of Mortgage Lenders’ £220bn estimate for 2015.

Total gross lending is forecast to rise further in 2017 climbing to £263bn. The trade body expects to see the strongest growth occur in the remortgage market which has historically lagged behind purchases as borrowers benefit from low mortgage rates tempting them to switch deals.

 

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