Bid To Rein In Buy-To-Let Lending

Amateur landlords will face tighter borrowing rules and stricter affordability tests under plans by the Bank of England to crack down on buy-to-let lending. The Prudential Regulation Authority (PRA) - the arm of the Bank that regulates banks and the financial sector - said it wants lenders to make income checks more stringent for buy-to-let investors and test whether they can still afford their regular repayments at higher interest rates. The PRA said while most lenders already met minimum requirements for lending to buy-to-let borrowers, it found some had weaker underwriting standards. Read more on Yahoo! News.

Landlords Bruised by U.K. Tax Rise Could Face New Loan Limits

The U.K.’s amateur landlords, already bruised by higher taxes when they buy rentals and lower rates of tax relief, could be facing a new blow. George Osborne told lawmakers in October that Bank of England will get powers to regulate the so-called buy-to-let market as soon as possible. The central bank may move as soon as Tuesday’s meeting of the Financial Policy Committee to curb lending for rentals. Governor Mark Carney moved to limit the riskiest loans to homeowners last year by setting loan-to-income limits for some mortgages. Lending to landlords soared afterward, leading Jon Cunliffe, the Bank of England’s deputy governor for financial stability, to warn that investors could amplify an adverse shock to the housing market because they might seek to sell their rentals. Read more on the Bloomberg Business website.

Buy-To-Let Landlords Snap Up A Million Homes

Buy-to-let landlords have driven a massive shift in the property market that has taken a million homes out of residential ownership in a decade. Since 2005, an extra one million homes are now occupied by a tenant rather than homeowner. Countrywide, which conducted the research, said amateur landlords and other property investors make formidable competition for those trying to buy a place of their own. Two million homes have changed tenure in the last decade, either switching from home owners to landlords or vice versa. The rapid growth of the private rented sector over the last 10 years means that one million homes occupied by the owner in 2005 are now owned by a landlord. Read more on the Introducer Today website.

NLA Reminds Landlords of Their Obligations

The National Landlords Association (NLA) is reminding landlords of the importance of understanding their obligations as its latest research shows that more than a quarter have been letting for less than five years. Research conducted by the NLA shows that 27 per cent of landlords have been letting for less than five years, with 14 per cent letting for just 2 years. One in five (21 per cent) landlords have been letting between six to 10 years, and just over half (52 per cent) have been letting for more than 10 years. The figures correlate with the NLA’s recent findings that the proportion of part-time or ‘amateur’ landlords is now at its highest ever level, comprising 70 per cent of the sector. Read more on the NLA website.