Get ready for another buy to let rush, warns mortgage lender
A buy to let lender says new underwriting rules from the Prudential Regulation Authority could trigger another rush to snap up investment properties.
The PRA issued its consultation paper on underwriting standards for buy to let mortgage contracts lst month in March this year. The anticipation is the new rules will be rubber stamped this summer in a bid to to impose stricter affordability measures on applicants.
If this happens, the new rules could be introduced as early as January 2017.
Now Fleet Mortgages says landlords seeking to remortgage and secure new loans are more likely to be successful if they apply before the new PRA rules are introduced.
“The recent PRA consultation on buy to let underwriting actually makes it more likely that we will see activity levels begin to increase again over the course of the year as we get closer to the implementation of the rules” says Bob Young, chief executive officer of Fleet Mortgages.
“Once the new rules kick-in, landlords and their advisers may well find their ability to secure the money they want has been compromised by the stricter underwriting criteria imposed on lenders, plus of course the likelihood that increased capital requirements will also impact on lender’s ability to offer the same levels of funding” says Young.
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