Stricter lending criteria for BTL mortgages

High street lenders are getting tougher with landlords applying for mortgages  to purchase a buy-to-let property, it has been announced in various publications that lenders are looking to introduce stricter criteria when it comes to checking applications, higher interest rates could also be applied to these mortgages.

It has been mentioned that Landlords will face tougher questioning about their private financial situation.  The stricter rules will  mean Landlords will be asked about their experience reagarding buy-to-let, they will be asked about the deposit and how it was sourced and  they must also prove that they are not wholly reliant on their rental income and to show they will also be able to cope with void periods and any repairs to the property. According to a recent report in the Daily Mail many of the major banks  are reported to be looking at or have already implemented the way they assess mortgage applications from potential buy-to-let landlords.

Stricter lending criteria for ordinary mortgages to homeowners has already been implemented, it came into force following the  Mortgage Market Review in April last year, buy-to-let mortgages are  not regulated by the FCA so were not affected by the review, experts expect this to change in the near future. Landlords have been enjoying very low rates over the last few years and as such more and  more buy-to-let borrowers have been attracted to buy-to-let as a way of supplementing income, especially the older savers who were poorly rewarded by their ordinary savings account.

The buy-to-let has put pressure on the availabilty and affordability of housing to the ordinary buyer, especially first time buyers who have probably been affected the most, buy-to-let is being blamed for the increase in property prices presently being experienced in many parts of the country.

There are concerns, that if lenders tighten up their affordability criteria and increase their rates then we will see less people aspiring to become landlords, and the affect of that will be less rentable property on the market which is exactly what the country does not need right now.

You May Also Enjoy

Breaking News

Breaking Property News – 29/03/24

Daily bite-sized proptech and property news in partnership with Proptech-X.   Geovation Spring showcase – why it is important that you come and support the founders The event takes place on the evening of Wednesday the 17th of April, at Sutton Yard, London EC1V 7EN, please get it booked into your diary today. As ever the…
Read More
Breaking News

Breaking Property News – 28/03/24

Daily bite-sized proptech and property news in partnership with Proptech-X.   tlyfe the tenant App gets huge marketing boost from national team tour from the Openbrix team As many will know tlyfe, powered by OpenBrix, is the UK’s most innovative tenant lifecycle app, taking the stress out of the move in process and helping to…
Read More
Breaking News

Over Four Out Of Five Tenants Unaware Of The Renters Reform Bill

OVER four out of five tenants remain unaware of the Renters (Reform) Bill and its contents, according to new research. The data comes from a representative survey of over 2,000 private renters conducted by the TDS Charitable Foundation, which works to advance education about housing rights and obligations in the private rented sector. The Bill…
Read More
Estate Agent Talk

What is Property Damage in a Personal Injury Case?

Property damage refers to any damage that affects things instead of a person. This might include damage to your car, house, etc. As such, it is not regarded as a personal injury case. However, when an individual is injured when the accident occurs, the affected person can file a personal injury claim. A typical example…
Read More
Love or Hate Rightmove
Breaking News

Rightmove comment on new 99% first-time buyer mortgage product

Matt Smith, Rightmove’s mortgage expert said: “It’s encouraging to see lenders continuing to try to innovate in the mortgage market, even after the government abandoned its own plans to encourage lower deposit mortgages in the Spring Budget. This new product has the potential to help some first-time buyers who fit the affordability criteria, but are struggling…
Read More
Breaking News

Breaking Property News – 27/03/24

Daily bite-sized proptech and property news in partnership with Proptech-X.   Coadjute ahead of the game as they are already licensed to provide digital TA6 Forms to property stakeholders This week, the Law Society announced its TA6 Form will now include Material Information as per the the National Trading Standards Estate and Letting Agency Team…
Read More