LETTINGS NEWS: Confirmed – stiffer mortgage lending for landlords next year


The government has given the Bank of England more powers to control mortgage lending in the buy to let sector – and that means tougher tests for landlords wanting to borrow.

The controls have been in the pipeline for some time but the Bank has now made it clear that from early in 2017 it will impose maximum ‘loan to value’ limits. This means it will tell mortgage firms they can lend only a set proportion of the value of a buy to let property.

No figure has yet been announced but many mortgage professionals believe it will be a 70 per cent maximum – meaning landlords will have to find at least 30 per cent as a deposit.

This may make little difference to most would-be landlords, as 30 per cent deposits are now commonplace; however, around one in six buy to let mortgages currently offer loan to value ratios of 80, 85 or 90 per cent. These are unlikely to continue in the long term.

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