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25mnb's blog Bank of England (BOE) member Richard Sharp has told the UK Parliamentary Treasury Select Committee (TSC) that he expects bank Buy-To-Let (BTL) lending to slow in the coming months.

Giving evidence alongside BOE governor Mark Carney, Mr. Fisher explained that the impact of Brexit and the recent landlord tax changes need to be understood before lenders are happy to commit further significant funds to the sector.
Responding to questions posed by the TSC, Sharp said he expected BTL lending would likely “cool significantly” in the coming months as banks assessed the impact of Brexit and tax changes on house prices.

The Government introduced new stamp duty land tax changes which introduces higher fees for owners of more than one home. In the first three months of the year, BTL lending rose sharply, with 48,800 BTL loans approved and advanced, according to data from the Council of Mortgage Lenders. Once the new tax came into force on April 1, however, lending to the sector sank. In April there were just 4,200 BTL loans approved and advanced, rising marginally to 4,400 in May, the figures show.

“BTL Landlords have a couple of significant events to process at the moment,” said Brixton and Battersea estate agent Eden Harper. “While banks may prefer caution over their mortgages and investment decisions, the same is true for landlords.”

Amid the uncertainty and caution that is expected to continue, mortgage interest rates remain attractive. This means that those BTL investors who are well-placed to make a purchase now – and their lender agrees – they could be in for a double benefit of low mortgage rates and an opportunity to make a purchase at a reduced price.

But, there’s a possibility that housebuilders may slow their pace of construction while they digest Brexit and plan a strategy that will see them through this volatile period. UK housebuilder Barratt Developments told Reuters news agency that they are considering building fewer homes than planned and also revising its land-buying programme in the face of an expected economic slowdown as the UK prepares to leave the EU.

"The principle focus of our reassessment will be about where we have approved land but we have not yet submitted for planning or alternatively where land is coming to the market that we could bid on and we are looking at whether we will or we won't," Barratt’s chief executive David Thomas told Reuters.

If the already low supply of new home construction slows further, then demand is likely to grow as there will be even fewer homes available than there are already. “Now could be the right time to make a purchase, for those who are financially secure and can buy in an area where securing tenants won’t be a worry,” central London estate agent, LDGsaid.

The future for BTL investors is currently uncertain, however, private landlords play a large part in providing homes for UK residents and without an alternative, that’s not likely to change any time soon. 

Edited