News: Bank of England to Limit Buy-to-Let Mortgages

The Bank of England is looking to put restrictions on how much money landlords can borrow through buy-to-let mortgages.

Why Has This Happened?

This news comes less than a month after the Autumn Statement revealed that buy-to-let landlords will soon be subject to higher rates of stamp duty than regular homebuyers – 3% more as of April 2016. The announcement sparked outrage among the landlord community but did not come as a total surprise given that the Bank of England had already voiced concerns about the current extent of lending to landlords.

Back in September, the Bank's Financial Policy Committee (FPC), led by Mark Carney, suggested that buy-to-let mortgage lending, if left as it was, could pose a threat to the country's financial stability.

In a September statement, the FPC said: "Buy-to-let mortgage lending has the potential to amplify the housing and credit cycles, though the extent of the amplification is hard to judge because the market has only recently grown to significant levels. Any increase in buy-to-let activity in an upswing could add further pressure to house prices."

What Are the Options for Buy-to-Let Landlords?

Given that the higher rates of stamp duty will come into force in a matter of months, and buy-to-let lending is about to become less generous, a pre-April rush in buy-to-let transactions has been predicted.

The landscape is less than ideal for landlords looking to purchase properties in the near future, but an Affirmative bridging loan could provide a solution. Our fast finance can help you secure your purchase without having to rely on the bank.

Have a read of how our bridging loans work and the costs associated, or call our Manchester office on 08000 44 84 84 and we will explain everything to you clearly. If you would prefer to talk via email, send your enquiry to enquiries@afff.co.uk.

Apply for your bridging loan now.