One Third Of All Landlords Are Not Up To Speed On New BTL Mortgage Rules
Apparently one in three buy-to-let investors remains unaware of the new BTL Mortgage Rules. They do not know what the effects will be if they wish to re-purchase their property or acquire new properties.
The new BTL mortgage criteria were first introduced in September 2017 and make it far harder for landlords with four or more properties to be accepted for a new mortgage application.
A recent study undertaken by a lender shows that 28% of the mortgage brokers who took part in the survey, said their clients had no idea that the new changes had come into force. The stricter lending criteria were introduced to reduce the number of new buy-to-let mortgages.
61% of the brokers did say that their clients were probably aware of the new changes but did not fully understand or realise their true significance.
The new Prudential Regulation Authority rules now categorises all landlords with four more or properties, as having portfolios and also introduced its interest rates-dependant ‘stress test’ to be undergone when applying for a new BTL mortgage.
Landlords entire property portfolio will be reviewed by lenders when applying for a single mortgage and this has hindered many applications from those with multi – properties who are working on low profit margins.
Karen Bennett, managing director of commercial mortgages of the lender, said: “This survey highlights the critical need for more education in the investor market regarding the impacts of regulatory change.
“The benefits of increased awareness are two-fold. Firstly it should help prevent clients from sleepwalking into a problem and allow them to adjust their investment strategy accordingly.
“Secondly, according to our research, brokers are also seeing increased enquiries from landlords which demonstrate that there are still opportunities for business growth.”