Buy-to-let investors face mortgage crisis as lenders introduce 'brutal' criteria
One of the largest buy-to-let mortgage providers has drastically restricted its lending in a move which experts say will be copied by others, and which will make it impossible for some landlords to borrow. (AtW's comment - just in time for BTL people to try to shift properties to Ltds)
Nationwide Building Society, the second biggest buy-to-let lender after Lloyds Banking Group, will require landlords to receive far more rental income relative to the costs of their mortgage than is currently the case. The change will apply from May 11.
Other lenders are expected to follow suit in a "domino effect" which could mean some landlords will not be able to obtain mortgages at all, brokers said.
Those worst affected are likely to be landlords in lower-yielding areas such as London and the South East.
The changes are in response to the Bank of England's announcement last month that lenders would face tougher rules when calculating mortgages for buy-to-let landlords.
Experts predicted that investors will need at least a 40pc deposit when buying property as a result of these tougher rules.
The Mortgage Works, the buy-to-let division of Nationwide, has tightened its "rental cover requirement", which is the amount a landlord needs to take in rent compared to the cost of the mortgage repayments. The ratio will go from 125pc to 145pc.
Source: Buy-to-let investors face mortgage crisis as lenders introduce 'brutal' criteria
Looks like I've called the top of the market correctly ...
One of the largest buy-to-let mortgage providers has drastically restricted its lending in a move which experts say will be copied by others, and which will make it impossible for some landlords to borrow. (AtW's comment - just in time for BTL people to try to shift properties to Ltds)
Nationwide Building Society, the second biggest buy-to-let lender after Lloyds Banking Group, will require landlords to receive far more rental income relative to the costs of their mortgage than is currently the case. The change will apply from May 11.
Other lenders are expected to follow suit in a "domino effect" which could mean some landlords will not be able to obtain mortgages at all, brokers said.
Those worst affected are likely to be landlords in lower-yielding areas such as London and the South East.
The changes are in response to the Bank of England's announcement last month that lenders would face tougher rules when calculating mortgages for buy-to-let landlords.
Experts predicted that investors will need at least a 40pc deposit when buying property as a result of these tougher rules.
The Mortgage Works, the buy-to-let division of Nationwide, has tightened its "rental cover requirement", which is the amount a landlord needs to take in rent compared to the cost of the mortgage repayments. The ratio will go from 125pc to 145pc.
Source: Buy-to-let investors face mortgage crisis as lenders introduce 'brutal' criteria
Looks like I've called the top of the market correctly ...
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