Metro Bank CEO Craig Donaldson told brokers at the Legal and General Mortgage Club roadshow that Theresa May’s government was unlikely to want to dampen buy-to-let activity in the way that had been intended by former Prime Minister David Cameron and former Chancellor George Osborne.
Housing minister Gavin Barwell has hinted that the government could divert its housing policy slightly from Cameron’s promotion of homeownership, instead considering rented accommodation as part of the government’s 2020 housebuilding target.
Donaldson explained that the intention to dampen buy-to-let activity by 20% had already been overachieved.
“Across all of the changes, the government only expected a 20% reduction in buy-to-let activity, and it has already changed by more than that. Remortgaging has remained steady but purchase levels have dropped by 50%, and that’s before the PRA changes and restriction to mortgage interest relief come in.
“The Treasury is aware of the impact and is listening and looking at it. I get the impression that David Cameron’s government is very different to Theresa May’s and I don’t believe they wanted to slow buy to let down as much as we’re seeing now. Because the people that brought the taxes in aren’t there anymore, one would suggest that the current government will have an easier time looking into it.”
While he remained optimistic, Donaldson said uncertainty caused by the EU referendum vote meant the government may not move to make any changes in next month’s Autumn Statement.
Mike Jones, director of intermediaries at Lloyds Bank, echoed Donaldson’s sentiments.
“The buy-to-let market is hugely important to the UK in a way that the last government seemingly failed to appreciate. I’m not convinced that all of these changes will stick, I would be delighted if the current government had a different view on it.”