Strict affordability rules are being placed on buy-to–let lending, making it harder for landlords to secure high loan-to-value mortgages.
Chancellor George Osbourne has just announced that he has granted the Bank of England ‘additional powers’ over buy-to-let mortgages, which has brought them in line with residential mortgages. Coupled with the changes to the way landlords are taxed, this signals a major change to rental finance in the coming years
How does it affect me?
If you’re considering becoming a landlord, and don’t yet have a mortgage, the mortgage change could be a thorn in your side.
Either way, becoming a buy-to-let landlord and maintaining profitability, has become much less viable, recently - with the introduction of this ruling and the severe new tax legislation - and many landlords may find that it may in fact be more financially sensible to sell up, and take the profit out of their property while they still can.
What do I have to do?
If you already have a buy-to-let mortgage, you don’t have to do anything. If you have a high loan-to-value ratio and you are looking at having to re-mortgage your property, you should consider staying with your current mortgage provider, rather than shopping around, as you are unlikely to be subject to such stringent affordability checks – your current provider already knows your credit history.
If you don’t already have a mortgage, consider your financial position carefully before you decide to jump into the buy-to-let market!
Can you help?!
Of course. If you feel that your rental property is going to start costing you more than it earns you, or that there may be some doubt that a re-mortgage is a possibility in the future, we are able to handle a speedy, cost-effective sale to help rid you of a pricy property problem.
If your property is still providing you with a healthy return, we can help you make sure that you never have any down time to worry about and that there is always a tenant in your property
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