Over the past year you may have heard about a ‘war’ being waged against the buy-to-let market. This could not be further from the truth – a war requires both sides to fight.
Instead, at a time when politicians and regulators are pointing their swords at buy-to-let, banks are using theirs to hack away at their prices in a desperate attempt to keep a wounded market alive.
The three months to 1 April saw a mad rush of activity, with landlords desperate to avoid being clobbered by increased stamp duty rates. Unsurprisingly, mortgage brokers are reporting a 10-15 per cent drop in the number of loans since.
This has clearly panicked the banks and building societies as price cuts (to record-lows) are the go-to weapon of choice when sales are bad. While this may prop up the market in the short term, the truth of the matter is the buy-to-let sector is likely to stagnate and even shrink in the long term.
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