Tuesday, May 23rd, 2017
Following guidance issued by the Prudential Regulation Authority, the changes made to buy to let ‘rental test’ rules introduced by many mortgage lenders at the end of last year have seemingly resulted in a dramatic decline in buy to let mortgage volumes.
Lenders now assess an applicants’ personal tax status and review any existing buy to let portfolios before reaching a lending decision on a case by case basis.
These changes have not only limited the borrowing capacity of landlords buying additional property but have also meant that others have been unable to restructure existing mortgages as the new rules now restrict the amount they can now borrow.
This situation has caused significant confusion and frustration amongst those seeking a mortgage on a buy to let property, and there is no question that this in turn has caused some investors to re-evaluate their interest in the buy to let sector.
Perhaps it is this that has resulted in a recent “relaxation” of the rules by some buy to let lenders. That said as these changes are not expected to create a “cascading effect” immediately, anyone considering making an application without professional advice should still proceed with extreme caution.
In short, the added layers of complexity and ‘stress testing’ means that it can still very difficult for landlords to source a buy to let mortgage even after spending considerable time and effort along the way.
Alternatively, a specialist buy to let mortgage broker who understands and can therefore interpret a lenders’ rules and criteria can make recommendations as to which lender or lenders that are much more likely to make a mortgage offer given all the circumstances.
Of course, your chosen buy to let broker should also provide you with a great service, so please make sure you check out what our clients say about us HERE.
Better still, experience our first-class service for yourself by calling Caboodle Finance of Sutton Coldfield, Birmingham on 0121 308 9114 to let us know how we can help you.
Caboodle Financial Services Ltd
240B Lichfield Road
Sutton Coldfield B74 2UD
Telephone: 0121 308 9114