The news for landlords seems to keep getting worse. Following a clampdown on tax relief and a huge hike in stamp duty on rental properties, the Bank of England announced yesterday that lenders will soon be forced to introduce substantially tougher borrowing standards when it comes to buy-to-let mortgages.
The Bank’s Prudential Regulation Authority (PRA) revealed that banks and building societies will be required to be far more cautious when it comes to loans for landlords. This means tighter checks on whether borrowers will be able to cope with higher mortgage rates, as well as greater scrutiny of owners of multiple rental properties.
The PRA’s announcement is the latest attempt by policymakers to rein in the rapidly expanding buy-to-let sector. The volume of landlord mortgages increased by 11.5 per cent in 2015, and lenders expect further growth of around 20 per cent by 2018-19.
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