A poll conducted by Mortgage Solutions of 148 readers showed that 32% of respondents think they will advise on 50% less buy-to-let deals in the second quarter, with 45% expecting this business to drop by 25% on the same quarter in 2015.
Just 6% think they will do more business than last year, while 17% think business levels will stay the same.
The findings come shortly after a 3% hike on Stamp Duty costs for buy-to-let properties was implemented on 1 April, with further intervention on the market also planned in the form of underwriting standards for buy-to-let loans and a reduction in the amount of tax relief landlords can claim on mortgage payments.
Doug Hall, director at 3mc, said the packager had not experienced a dip in business volumes so far but expected lower lending levels to be felt in the mainstream buy-to-let purchase market.
“You’ll find that there will be an increase in specialist lending that will eventually take more market share of the overall buy-to-let market, through limited companies, HMOs and multi-units on one title, for example. That’s definitely what we’ve been seeing as a business.
“The market is likely to stay in the region of £35bn to £37bn in lending this year, but there will be more of the specialist deals going through as investors look for higher yielding properties because of changes to tax in the sector.”
Hall explained that under the Prudential Regulation Authority’s underwriting guidelines, lenders will be able to opt out of the standards for pound-for-pound remortgage deals, which would likely prop up the market further.
“In the buy-to-let market the fact of the matter is that 60% of all deals are actually remortgages anyway. The majority of products are two-year products, so you’ll have the flow of investors who started their mortgage term in 2014 looking to remortgage this year.”