A crackdown on the buy-to-let market makes it to the front page of a number of this morning’s newspapers following recommendations published by the Bank of England yesterday.
The Bank announced criteria that will make it tougher to secure a loan on a buy-to-let property, including forcing all applicants to pass an affordability test based on a rise in interest rates to 5.5 per cent from today’s low of 0.5 per cent. Under the proposals, banks will have to take into account all the costs to a new landlord of owning the property as well as the personal tax liabilities and existing expenses of a potential borrower.
Lenders had told the central bank that they planned to increase buy-to-let lending by a fifth over the next two years, but the Bank said that its new measures could slow this rate of growth by between 10 per cent and 20 per cent.
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