An investment report from credit ratings agency Moody’s suggests it is concerned about the effects of Brexit on the housing market
An investment report from credit ratings agency Moody’s suggests it is concerned about the effects of Brexit on the housing market, and in particular lead to a sharp fall in the purchase of buy to let units.
“With reduced demand for credit and downward pressure on house prices, economic uncertainty will likely reverse previously positive market conditions for the UK mortgage market” notes Kamran Sabir, vice president of Moody’s.
The agency says a sharp contraction is possible in the purchases of buy to let properties because of wider economic uncertainty and a mix of property industry issues such as higher stamp duty for ‘additional homes.’
In particular, Moody’s believes building societies – rather than banks – are likely to switch emphasis away from mortgages to fund BTL purchases.
The agency says: “Post-Brexit, Moody’s expects building societies to be more reliant on growth in deposit gathering and reduction in lending to help bridge their funding gap. In the UK market, most future issuance from building societies will be concentrated in the prime mortgages segment, rather than BTL mortgages.”