New Regulations and your Buy to Let

January 2017 is the deadline for new regulations in BTL lending to kick-in. If you haven't yet considered how this will effect you and your own BTL portfolio, then you need to act fast!

The amount you can borrow is typically dictated by the rent you receive for a BTL property. The new rules will add additional stress testing to make sure that a property will be self supporting financially. This has come about after changes in tax relief for landlords were announced in 2016, which could mean a decline in profits. This means lenders want borrowers to have a greater 'buffer' in place to account for rental voids, increases in interest rates over a 5 year period and the loss of tax relief for some individuals (therefore higher tax bills).  

Some individuals could find themselves in a mortgage trap if the new rental calculations prevent them from re-financing their properties. One way to deal with this is to reduce the mortgage balance to fit with criteria, but not everyone can do this. For this reason, some properties will be sold in preference for lower cost properties with higher rental yields. 

Please note that the content of this blog has been formed around my own view of the market as it stands today. I strongly advise that you get professional help to understand your own position and please don't wait. The clock is ticking!