17^th Sep 2017

With the onset of September's buy-to-let lending criteria being changed landlords should start to consider remortgaging their properties.

Over the last four months BTL remortgage transactions has increased its share of the overall lending market with new buy-to-let loans falling.

An industry body claims that landlords are opting for remortgages so that they will not be over exposed to the new BTL tax system.

The stricter lending regime from the Bank of England’s Prudential Regulation Authority (PRA) changes are further measures to 'police' the sector.

A spokesperson for the industry body, said: “Since the PRA regulations were introduced in January, the marketplace is looking considerably more complex. It was always likely that lenders would start to demand more evidence from applicants, and landlords are already feeling they have to go further to prove that they can afford finance.

“Changes to buy-to-let taxation will eat away at many landlords’ profits and make it more challenging for them to manage their businesses,” he added. “As a result, many are looking to limit their exposure to the changes, which is why we’ve seen a rise in remortgaging.”

According to industry body's latest quarterly landlord panel, 43% have said that they are finding it increasingly difficult to arrange new BTL mortgages since the turn of the year.

Around 53% of landlords have reported that they now have to provide evidential documents such as business plans, cash flow predictions and tax returns to stand any chance of being given a mortgage.

The spokesperson added: “The situation is due to worsen from September and while it may not be financially adventurous for everyone, if you’re considering remortgaging or expanding your portfolio then do so now to avoid any further difficulties.”

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