The latest Bank of England Agent’s Summary of Business Conditions report is compiled following discussions with 700 business across the UK.
The buy-to-let market has been subject to a number of changes from the Government and regulators over the last couple of years, such as the increased rate of Stamp Duty on second homes and the restriction of some tax breaks.
According to the Residential Landlords Association, as many as one in four landlords are currently selling properties as a result of Government tax changes.
Activity up across the market
The Bank of England’s report said that while activity in the housing market had picked up following a period of weakness after the result of the EU Referendum, though it highlighted that purchases “remained concentrated in lower-price brackets and in the new-build market”.
In contrast, transactions for property values above £1m have been muted.
While the falls in sterling had increased interest in London property from overseas investors, that had yet to translate into an increase in transactions, according to the Bank of England.
The report also suggested there is currently “strong competition” between mortgage lenders currently, and noted that the low numbers of properties available for sale were helping to support modest price inflation.
Positive prospects for housebuilding
There was also some positivity about the prospects for housing construction.
While the report noted that construction output growth was modest, housebuilding had been “relatively more resilient” than commercial building or local authority funded work. In addition, materials shortages and recruitment difficulties had eased over the year.
The housing announcements in the Autumn Statement were also said to have “boosted sentiment about future activity”.
