Buy to Let Mortgages and Politics

Following the leader of the opposition's rent control comments recently and the Prime Minster espousing free capital markets, is it any wonder that many existing and indeed potential new landlords are confused about the direction of the Buy to Let (BTL) market - whichever party is in power.

Over the last couple of years the BTL market has seen a raft of measures intended to slow down growth. The Stamp Duty extra 3% levy, personal tax changes and more stringent stress test calculations, which lenders must abide by, have been implemented. Next month also sees more regulatory changes where Landlords with four or more properties with mortgages must jump through underwriting hoops to achieve another BTL mortgage whether to purchase or re-finance.

With just over 150,000 new build starts in 2016 supply still falls woefully short to meet demand estimated at 250,000 to 300,000 each year. These figures also underpin property prices generally remaining resilient in most areas of the country. With our population still growing the result is a flow of people looking to rent who can not afford to buy or require flexibility to move around due to job and family requirements.

With fewer amateur or accidental Landlords entering the market the slack will be taken up by professional landlords. This could be a good thing as the vast majority maintain properties to the right standards and generally treat tenants fairly.

Arguably the BTL sector has been through a boom cycle and now appears to be easing back. Hopefully we will see a professionalised future that will benefit everyone -  tenants, landlords, lenders and mortgage brokers.

With the upcoming Autumn budget perhaps the Chancellor will intervene further this time with a positive initiative.

Your home may be repossessed if you do not keep up repayments on your mortgage.

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