Supervisory Statement SS13/16

[Taigo]

Congrats on the new board Stooz & Clariman. Been a while since I posted on the old boards but this zesty new site has given me a tingle!

This cheery little piece of regulation from the PRA is starting to hit home now with the availability of BTL mortgages.

www.bankofengland.co.uk/pra/Documents/p ... ss1316.pdf

Unless you are taking a 5 year fixed rate or a lifetime tracker then it is likely that your rent cover is going to need to be 145% of an assumed rate of 5.50%, which is quite a jump from the 'standard; 125% @ 5% we've been used to for the last 4 or 5 years. Concessions made at lower loan to values but overall this is making it much tougher to get a BTL mortgage for individuals. We have seen quite an uptick in lenders offering Ltd Co loans but the rates and fees are invariably higher.

This coupled with with the increase to SDLT and offsetting interest payments for higher rate tax payers is really going to start to bite next year.

There were rumblings that ATED was going to be reduced to £250,000 for properties held in limited companies which could also be a game changer, but I've not been able to find any confirmation if this is indeed the case.

Anyhoo, 2017 will be another interesting year for residential investment property and the landlords that own them. My suspicions are we'll see house prices drop off a little in the short term more FTB's in the market and less new BTLers.