Tougher mortgage rules for BTL landlords
It is getting tougher for Landlords who need a mortgage to fund their buy-to-let, tighter checks combined with higher interest rates could see less landlords applying to borrow from now on, this comes at a time when landlords are being hit with new regulations across the board, government announcements over the past week made it clear that stronger action will be taken against so called rogue landlords and all landlords will have to check their tenants are not illegal immigrants, those that fail to do so could be fined or imprisoned.
High Street lenders are introducing strict criteria for landlords when applying for their loan, the current buy-to-let boom is feared to be pushing up house prices across the UK, the amount landlords will be able to borrow is expected to fall by a large amount. Those applying for a buy-to-let mortgage should be aware that lenders will in most cases want to ensure that the rental income can cover 125% of the repayments.
The high street lenders could be asking alot more questions to landlords applying for a loan, such as ability to pay, their personal financial situation, they may also be asked about their experience in the buy-to-let industry and the source of their deposit
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