The head of buy-to-let at lender West One has expressed his confidence in the buy-to-let market and believes market observers are being overly negative about the outlook for the sector.
Andrew Ferguson argues that predictions that the sector is dying are well wide of the mark and, instead, believes the sector is evolving to meet the changing needs of landlords, tenants, and the broader UK housing market.
He also believes that some forecasters are being overly pessimistic in their predictions and that the sector is far more resilient than it’s given credit for.
UNDERPLAYED PROSPECTS
Ferguson argues that lending predictions last year were overly cautious and that many observers continue to underplay buy-to-let’s potential for the coming year.
He cites more positive forecasts from the Intermediary Mortgage Lenders Association (IMLA), which last month predicted that lending would grow 14% to £38bn in 2025, before increasing a further 11% to £42bn in 2026.
“The buy-to-let market is evolving, not dying and it remains a critical pillar of the UK housing market”
Ferguson said: “I understand the recent market conditions have caused many market watchers to be downbeat on buy-to-let, particularly with the Renters Rights Bill, which places further restrictions on landlords, coming down the line. But those predicting the demise of the sector are overly pessimistic.
“The buy-to-let market is evolving, not dying and it remains a critical pillar of the UK housing market. Those of us that work in it know that.
“Market naysayers may point to pessimistic projections for the buy-to-let market in 2025 as further evidence of a terminal decline. Such a conclusion is incredibly short-sighted. To date, landlords have weathered significant pressures, from tax relief changes to increased regulation.
“Despite that, the private rented sector remains essential, housing nearly one in five households in the UK. Policymakers do understand that a healthy private rented sector is vital to avoid a housing shortfall while other housing initiatives, such as social housing, are still years away from meeting demand.
“It is important to consult the data and projections of multiple sources when considering predictions like these. However, the IMLA rightly stands out in its forecast that bolsters the fact that buy-to-let is not on the way out, but on the way into a new era as it passes through what has been a turbulent period in the buy-to-let environment.
“Its numbers give reason to be optimistic about buy-to-let gross lending in 2025, and although challenges remain and uncertainty persists, the buy-to-let market was resilient in 2024 and if some of those head winds change direction, I am certain we may see greater growth than many are predicting.”
