Sector showing positive signs of a recovery

The buy-to-let market has been one of the biggest casualties of the credit crunch. But it has received a boost recently with encouraging signs that lending conditions are finally starting to improve. This has been partly due to investors returning to the buy-to-let sector after many had previously put their plans on hold because of concerns that the new capital gains tax (CGT) rate would potentially exceed 50 per cent.

Following the Chancellor of the Exchequer, George Osborne’s first emergency Budget speech, when he announced CGT would increase to the lower-than-expected 28 per cent, the sector quickly experienced higher levels of demand for property.

During his emergency Budget speech, the Chancellor of the Exchequer, George Osborne MP, announced that higher-rate taxpayers would see the rate of capital CGT increase to 28 per cent from the previous 18 per cent, while the annual exemption of £10,100 would remain in place. He also said basic-rate taxpayers will continue to pay CGT at a rate of 18 per cent.

The buy-to-let market has seen the number of products that were once available at the peak during September 2007 fall to below 300 products. However, according to Moneyfacts the sector is showing positive signs of a recovery with the number of buy-to-let loans rising by 50 per cent since September last year.