In this video Emma Falco the general manager of Belvoir Peterborough explains the changes planned...
In this video Emma Falco the general manager of Belvoir Peterborough explains the changes planned for buy to let mortgages. The transcript of the video is shown below.
Hi, I’m Emma Falco from Belvoir Peterborough and I am here today to speak with you following further announcements of changes to buy-to-let mortgages. The most recent announcement has stated that buy-to-let mortgages for accidental landlords will now be subjected to affordability tests. New rules in Europe have been created which insist on changes to how accidental landlords are lent money.
An accidental landlord may be somebody that has inherited a property or it may be that it’s a property they used to live in that they were unable to sell, so they have decided to rent it out. Essentially it’s somebody that didn’t purchase the property for business purposes. It may be that they inherited it or, like I say, they lived in it and couldn’t sell it.
Most buy-to-let mortgages currently are calculated based on the rental income that property generates. However these new rules will mean that mortgages for accidental landlords will be assessed on their affordability. This is likely to affect older landlords who may be refused a buy-to-let mortgage in future.
The Council of Mortgage Lenders are predicting that these changes will impact fewer than 20% of the UK’s current buy-to-let mortgage market. However they haven’t got statistics yet to back up these figures.
The changes aren’t due to come into place until March 2016, so there is plenty of time to seek information or advice on the subject. If you would like to discuss this topic in more detail or if you have any questions, please get in contact using the details below. I’d be happy to have a chat with you. Thank you.