A recent article in Mortgage Strategy has given the buy-to-let sector of the mortgage market a thumbs up, in spite of what seems to be the Government’s short sighted anti landlord policy.
The Chancellor George Osborne has already attempted to cool the buy to let market by announcing cuts to tax relief landlords receive on buy to let mortgage interest, plus a new Stamp Duty Land Tax “surcharge” on any second property purchases.
Now it appears the Prudential Regulation Authority want to throw in its “two penn’orth” by publishing a paper proposing to strengthen interest rate stress testing and underwriting standards used by buy to let lenders. It’s likely that the Bank of England’s Financial Policy Committee will bring in new rules for buy-to-let underwriting and that these will be incorporated into MCOB rules (which govern how mortgage lenders and brokers do business).
In the article Hometrack Director of Research Richard Donnell said “The Government changes might temporarily stifle demand, but will not hobble the buy-to-let market in the long term.”
He went on to say “Buy-to-let will remain the future of the housing market but all these changes will slow the rate of growth in lending.”
So business as usual then……………….