Buy-To-Let Mortgages Riskier Than Before Crisis

Buy-to-let mortgages in Britain, especially those issued recently, are more risky than loan deals signed before the 2008 financial crisis, according to a Moody’s report. The ratings agency said one factor was that a new cohort of lenders, in their quest for market share, tend to issue loans with higher average loan-to-value ratios, laxer credit history constraints and longer maximum maturities than established lenders, degrading the quality of recent buy-to-let loans. Pre-crisis loans have also benefited from rising house prices in a way newer ones will not, it continued. Loan-to-value ratios have fallen more on legacy loans thanks to this than they have on newer ones. Read more on the Reuters website.

https://uk.reuters.com/article/uk-britain-mortgages-moody-s/uk-buy-to-let-mortgages-riskier-than-before-crisis-moodys-idUKKBN1HI294

HCA Overhaul to Improve Regulation

The social housing regulator is to appoint seven new senior members of staff and overhaul its structure in a bid to boost its effectiveness.  The move follows concerns by regulation committee members last year that it does not have the ‘resources to function effectively’. It comes as regulatory concerns were cited by ratings agency Moody’s as the reason for downgrading most of the sector.  Read more on Inside Housing.

HAs Able To Manage Risk from Universal Credit Reform

The direct payment of housing benefit to tenants under the recent universal credit reform is a manageable risk for publicly rated English housing associations, says Moody's Investors Service. As such, the rating agency does not envisage universal credit to bear any rating implications in the near term.  Moody's opinion is based on five key considerations, namely: the limited scope of the reform, the central government's proposed safeguard mechanisms, the reform's gradual implementation, the remedial measures of individual issuers and the view that the bulk of tenants are expected to continue to pay on time.  Read more on the Moody’s website.