Adding to uncertainty
In September 2016, the PRA set out stricter underwriting standards for the buy-to-let market following a review. It outlined the minimum expectations firms should meet in underwriting buy-to-let mortgages.
Among its requirements are that affordability assessments should take into account borrower’s costs, including tax liabilities, personal income and possible future interest rate increases.
Coupled with the government’s tax tweaks, buy-to-let advisers and investors are facing some of the biggest changes the market has seen in a while. While these new rules are not tax-related, they do add to the ongoing uncertainty in the buy-to-let market.
With that in mind, Mr Heron advises buy-to-let investors to make sure “they’re fully up to speed and understand the implications of these changes”.
eleanor.duncan@ft.com
