What is changing?
The amount you can borrow on a BTL property has been reduced by 4 major lenders in anticipation of regulatory changes. As an example, on a property yielding a rental of £800 per month the maximum borrowing with these lenders will be reduced by around £20,000. This could affect a borrower’s ability to obtain a new product or to expand their portfolio.
Will this affect me?
It could do. If other lenders follow suit, then these rental calculations could become the norm. One industry insider has said that loan to values could be capped at 65% and one major lender has already cut its loan to value maximum. Loans on lower yielding properties are anticipated to be affected worse.
What can I do?
Express Mortgages has access to exclusive products which may be able to facilitate further borrowing whilst you still can. One of our advisors will advise if this is the best option for you, and have options of over 2000 products on a standard BTL re-mortgage from a variety of providers.
Thinking outside the box could also be the answer. Spreading your debt around different properties to lower the risk of rental voids, placing properties in a limited company if you are a higher rate tax payer and bridging finance to purchase new property are amongst the solutions we can provide. We are also finding that investors are beginning to buy higher yielding properties or houses of multiple occupancy (HMO), for which we have exclusive access to certain lenders for. For further details please speak with your adviser.
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