Landlords are being urged to re-mortgage before tougher buy-to-let lending criteria, due to be introduced in September, make it more difficult to obtain finance.
The call comes as the proportion of BTL re-mortgage transactions, as a share of the total lending market, has risen over the last few months, and as a diminishing demand for new buy to let loans has driven many lenders to slash mortgage rates.
The National Landlords Association (NLA) says the rise in re-mortgages is down to landlords looking to limit their exposure to the new BTL tax regime. The forthcoming tightening of lending criteria is the latest in a series of attempts by the Bank of England’s Prudential Regulation Authority (PRA) to cool the BTL market, following measures introduced earlier this year.
The NLA’s most recent Quarterly Landlord Panel shows that landlords are already finding it harder to arrange mortgages, with 43% saying the process of obtaining finance has become more difficult since the beginning of the year.
Furthermore, more than half (53%) of landlords report that they have had to provide additional evidence to support recent mortgage applications, including tax returns, cash flow forecasts, and business plans.