Is buy to let still a healthy market? Paul Martins offers his opinion on how the market has reacted to the rules, regulations and restrictions brought in by the UK Government
In 2017 buy to let lending totalled £35.8bn according to figures published by UK Finance. This year we are expecting total lending to sit at around £32bn. That’s a small decrease but even so, it’s worth pointing out that the market is still performing well and has come a very long way in a short space of time…
There is no denying that buy to let has been in the spotlight for quite some time now with the Government throwing more than a few spanners in the works along the way, but I have to say lenders still have good appetites and we are even expecting some new entrants this year.
A recap on rules, regulations and restrictions
I think it is important to recap on the three Rs namely rules, regulations and restrictions. They are affecting and will continue to affect landlords going forwards.
EPC ratings. In short, no EPC, no buy to let mortgage. Residential landlords are no longer able to grant a tenancy to new or existing tenants if the property’s EPC rating is F or G – this came into effect on 1st April 2018. From 1st April 2020, if there is a tenant already in situ it will become illegal for residential landlords to continue letting the property out if the EPC rating is F or G. Need more information? Visit our website where you can instantly retrieve the EPC rating on your property and watch our latest webinar on the topic.
Mandatory HMO licence and minimum room size. Currently, mandatory licensing only applies to HMOs in mandatory licensing areas or where HMOs are at least three storeys high, rented to five or more people who form more than one household, and who share facilities such as toilet, bathroom and kitchen. However, from 1st October 2018 the parameters of mandatory licensing are being extended to include properties with any number of storeys.
Minimum room sizes for bedrooms are also being introduced, as well as a need for adequate waste and recycling facilities. Again, full details can be found in our recent webinar which you can find on our website. Alternatively give us a call on 0345 345 6788 and we’ll point you in the right direction.
Income tax relief restrictions for landlords tax year 2017/18. Historically, landlords could deduct all of their mortgage interest and other finance costs from rental income before calculating tax. But not anymore. April 2017 brought with it a new fiscal regime which is slowly phasing out this tax relief and replacing it with a calculation which means that most landlords will pay more tax. Now, I realise you might not submit your tax return until next January but it is important to understand how you will be affected and what you can do about it. We’ve created a guide which we hope will show you just that. You can download this guide from our website or give us a call and we can send you a copy in the post!
BTL Mortgage Broker of the Year
I am delighted to report that Mortgages for Business was awarded Buy to Let Mortgage Broker of the Year for the seventh year in a row at this year’s Business Moneyfacts Awards. The team and I are all extremely proud of the result.
Finally, I would like to take this chance to remind you of our FREE property portfolio review service, where we find out if you can save money by switching provider or unlock any untapped equity. Simply send us your property portfolio spreadsheet, or download ours, fill it in and send it back to us. Our spreadsheet has been designed to capture all the property portfolio information lenders will require to assess an application from a “portfolio landlord” – a landlord with four or more mortgaged properties.
Remember, we have access to the whole market and are often presented with limited edition rates for our clients, so if you have any property finance requirements do get in touch with us today on 0345 345 6788
Paul Martins has left Mortgages for Business for pastures new. For more information or for any questions relating to this blog, please contact the BTL Team on 0345 345 6788, where one of our consultant mortgage brokers will be happy to assist.