CONTACT US
Rushden | 01933 313600
rushden@charlesorlebar.co.uk
Associated Park Lane Office | 0203 3688173
Tougher rules to be introduced for BTL market
Following a consultation on the Buy-to-Let market earlier this year, the Prudential Regulation Authority has now confirmed it will introduce tougher underwriting criteria, to be phased in from January next year.
The aim is to make sure that borrowers are not over-stretching themselves, and can cope with their mortgage payments as well as the other costs associated with being a landlord.
These costs could include repairs, voids and management fees. Tax liability should also be accounted for, particularly for higher rate taxpayers who will see their tax relief on mortgage interest eroded from next April.
The regulator will require that lenders consider potential increases in interest rates. As a result they will be expected to assume a minimum stress rate of 5.5%, unless the mortgage is fixed for at least 5 years.
A number of lenders have already reviewed their policies and increased their rental requirement, their stress rate, or both. More are likely to follow suit over the coming months, and ultimately this could mean that landlords won’t be able to borrow as much based on rental income.
It’s therefore important for investors to be aware of increasing costs over the coming years and account for these when planning a purchase.
CONTACT US
Rushden | 01933 313600
rushden@charlesorlebar.co.uk
Associated Park Lane Office | 0203 3688173
ABOUT US
We are a local and knowledgeable estate agency firm in Northamptonshire and North Bedfordshire with offices in Rushden and London. We are enthusiastic, proactive and very trustworthy.
2018 © Charles Orlebar Estate Agents Ltd. All rights reserved. Terms and Conditions | Privacy Policy | Cookie Policy | Complaints Procedure