Why securing a mortgage for buy to let properties is about to get harder

Written by Enness Private on - Finance -

It’s been a challenging year for buy to let landlords. With changes in buy to let mortgage tax relief and affordability stress testing, it’s little wonder buy to let purchases have fallen by almost 50%. Many of those deterred from securing a mortgage for buy to let properties would have been amateur landlords, such as those purchasing a buy to let to generate additional income. For portfolio landlords, there are more challenges on the horizon.

The Prudential Regulation Authority (PRA) plans to introduce stricter underwriting standards for landlords with more than four mortgaged properties. If you’d like a further overview of the effect these changes will have on landlords, check out our analysis here.

However, borrowers aren’t the only group who will be affected by this. Tougher underwriting standards mean lenders will therefore need more information during the application process. Although some lenders will be using external software to deal with the extra admin, other lenders have indicated they will pass this work on to buy to let brokers.

How long will a mortgage for buy to let properties take?

This will have a knock-on effect on the amount of work brokers are able to do, and the speed at which they can resolve cases. Different lenders will have different policies—and brokers could be expected to work across these policies, with a solid understanding of each. This could place a huge time pressure on brokers, increasing how long a mortgage for buy to let properties takes. This may even lead some brokers to withdraw from buy to let broking.

At Enness, we retain our commitment to providing unparalleled levels of customer service—but there’s no denying the PRA changes will make working on portfolio landlord mortgage applications more challenging.

If possible, I would advise landlords who are considering remortgaging to contact us as soon as possible to discuss your options. Buy to let remortgage transactions have risen over the last few months; interest rates are currently very low, so landlords are motivated by both cheap borrowing and the prospect of a more difficult application process.

By Anna Thompson – Associate at enness.co.uk

Author: Enness Private

venitoo-advert-banner

Share
 

Recent Popular Articles


Brexit fears result in Buy-to-let mortgage rates dropping


Lenders have slashed their buy-to-let mortgage rates and increased the amount they are willing to lend as a result of the Brexit result. Many of


Why securing a mortgage for buy to let properties is about to get harder


It’s been a challenging year for buy to let landlords. With changes in buy to let mortgage tax relief and affordability stress testing, it’s little


HMO checklist: getting your property ready for the new semester


Here’s a fact to ease the challenges of owning a Houses in Multiple Occupation (HMO) property: already this year HMOs have returned higher yields for


Market uncertainty makes it a nervous time for investors


The way in which the property market is moving is making it difficult for investors to make decisions. The referendum that is taking place on


5 reasons why you should use a mortgage broker


Securing a mortgage has previously been likened to a rite of passage, being something nearly all of us have to pass through when becoming responsible