Buy to let investors with 4 or more properties in their portfolio are starting to feel the impact of the change in regulations for lending that came into force in September this year. I was speaking to Tom James at Thomas Nicholas Financial Services, based in Melton Mowbray, to find out what impact this has had for local investors.
He explained that previously lenders assessed a buy-to-let mortgage applications based on the rental income and property value of the property they are lending against. From 30 September 2017, any landlord who owns four or more mortgaged buy-to-let properties will have to submit income and mortgage details on all of them every time they re-finance one, or purchase a new property.
This has hit investors looking to purchase another property for their portfolio or looking to re-finance their properties. The criteria has become much stricter than we have seen in the past so lenders are refusing to remortgage a property that previously fit their criteria.
This is resulting in some landlords increasing the equity they have in a property, considering selling their investment property and in some cases deciding not to invest in additional properties. This is not good news for tenants, who in Melton Mowbray are seeing rents continue to rise as the stock of available rental property does not satisfy the high demand in the area.
You can do something to minimise the impact of these changes.
It’s vital that a landlord with a portfolio of properties regularly assess the rental levels to ensure they keep up with the current market rates. Inspect the condition of your properties, it is vital they are being kept in a good condition to ensure you receive the maximum return on your investment and to minimise void periods.
If you would like to review your current portfolio performance please contact me to arrange a no obligation meeting to assess the current rent and property conditions.
You should also contact Tom and look at the lending you have in place to ensure you are fully aware of what you should expect when you need to renegotiate your borrowing.
Charlotte Baker - Belvoir Lettings Melton Mowbray 01664 569700
Tom James - Whole of market, free of charge mortgage advice: 0330 1200324