The buy-to-let market could become a ‘car crash’ next month, as a result of the alterations to lending rules for portfolio landlords. This is the view of leading industry peer, David Whittaker, Chief Executive of Mortgages for Business.
From 1st October, new rules, initiated by the Bank of England’s Prudential Regulation Authority, will impact on landlords with four or more investment properties.
A report from Mortgage Strategy suggests that Whittaker told a financial services seminar in London that a mixture of a lack of knowledge from private rental sector members and an absence of leader information would lead to a number of issues.
Mr Whittaker observed: ‘It’s going to be a car crash. Landlords don’t know about it and they’re going to say to advisers, ‘I don’t like what you’re asking me to supply and I’ll go somewhere else. Four days later they’ll come back to you the adviser and admit you were right.’
Industry peer suggests buy-to-let could be a ‘car crash’ next month
‘It’s a bit late in the day for lenders to be saying we’ll announce shortly,” he said. “I wish advisers all the best of luck on October 2 because there’s going to be a lot of white noise around the market.’
In the last few weeks, a number of lenders have outlined new criteria in order to meet tighter regulations, which take into account a wide range of personal and financial information regarding the borrower.