Further controls to the formerly booming buy-to-let market are unlikely to be enacted, according to analysts at Barclays, who have taken a more positive stance on the specialist lenders.
“Some measures of control were perhaps inevitable to slow rates of growth exceeding 40% year-on-year,” the bank said in a note to clients.
“However, we now believe we are past the nadir for BTL outlook.
“We view further regulatory and taxation controls as unlikely if the UK government does not want to risk pushing the economy into a post-Brexit recession.
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“We do not believe that a reversal of any BTL-related stamp or income tax is likely in the Autumn Budget.”
In a note issued on Tuesday, Barclays upgraded the so called challenger banks OneSavings Bank (LON:OSB) and Aldermore (LON:ALD) to ‘overweight’ from ‘equal weight’.
“UK challenger banks remain geared plays on the macro, in our view. However, high profitability, comfortable capital ratios and low valuation multiples should provide significant insulation,” it said.
Barclays left Paragon and Shawbrook (LON:SHAW) at ‘equal weight’.