Authorities are expecting another buy-to-let housing rush, similar to the one experienced earlier this year prior to the Stamp Duty Surcharge, as the Prudential Regulation Authority outline their plans to impose stricter affordability measures on applicants by 2019, although should discussions move quickly the bill could potentially be put into place as early as January 2017.
These proposals have been put forward as a cautionary measure that the PRA says will help against the current trends that lenders say show a gross increase of 20 percent In BTL borrowing over the next two to three years. Lenders during this time would need to be especially vigilant to how much cash borrowers have to cover their interest payments amidst projected interest rates rising as high as 5.5%.
PRA believes that by putting these measures into place, buy to let mortgage approvals will be reduced by 10 to 20% by 2019. Chancellor George Osbourne stated that these measures are ultimately “aimed at restricting the impact that the buy to let market has on the economy”.
It remains to be seen how the current approach of knuckling down on the buy to let sector will affect property supply, but tenants and landlords can expect to see the results from this knock on effect over the course of the next few years.
Let Leeds has seen an increase in buy to let purchases over the course of the last few months, stemming back from the stamp duty changes that have enabled the company to sell £6.6m worth of properties in just 4 months. Our investment sales service shows the desire that landlords have to get into the buy to let market, and properties are selling thick and fast.
Why not call our friendly team who will be happy to advise and assist regarding the sale of your investment property? Should you wish to book a free valuation why not call our Sales Team on 0113 320 2000.