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

do i need planning permission for a shed
Home and Living

What you need Planning Permission for in your Garden

Gardens, mostly those at the rear of property, offer us a great diversity of options outside just a lawn and patio area. From outside office space to swimming pools, gardens are a great space in which we can add great value to our lifestyles from leisure to work. Planning permission is the phrase used to…
Read More
Breaking News

BREAKING PROPERTY NEWS – 16/05/2022

Daily bite-sized proptech and property news in partnership with Proptech-X.   nurtur.group continues to strengthen its leadership team With my non-journalist hat on, and to ensure complete transparency, I also hold a position as a non-executive director at nurtur.group – AS Following the recent acquisition of BriefYourMarket, proptech supplier, nurtur.group has announced that Damon Bullimore…
Read More
Overseas Property

How to reside in Spain through an investment

Golden Visa residence in Spain is a residence visa for investors. It was created by Law 14/2013 on support for entrepreneurs and their internationalisation, and its purpose is to attract non-EU foreign investors to Spain. This visa offers legal residence in Spain for a period of 6 months to 2 years depending on the type…
Read More
burglar uk
Home and Living

What do Burglars look for in a House?

We are all aware, unfortunately so, that today we need to be very careful on what we leave on show that could tempt a burglar / thief. Home security has certainly improved over the years including methods of combating crime and deterring those tempted to break in and enter. Especially with the invention of the…
Read More
Breaking News

WEEKLY NEWS ROUNDUP – 13/05/2022

A roundup of the week’s top property and proptech news stories in partnership with Proptech-X   What next for Rightmove as CEO quits? PRESS RELEASE: 5 Million Private Renters Live in Unhealthy Homes Reveals Recent Research by Yuno What does The Queen’s Speech mean for property? What are the real Proptech trends? What next for Rightmove…
Read More
Kerb appeal
Home and Living

Top Tips to increase Kerb Appeal

How many times have you driven past a row of houses and admired an individual property? Something usually catchers your eye be it architecture, colours, plants, flowers, iron work and more. We can all obviously stand out with bright colours and loud design work, though this can be sometimes an eye sore instead and can…
Read More