The National Landlords Association is urging buy to let investors to consider remortgaging in the very near future ahead of new restrictions which may make lending tougher. 

The forthcoming tightening of lending criteria is the latest in a series of attempts by the Bank of England’s Prudential Regulation Authority to cool the buy-to-let market, following measures introduced earlier this year. 

Most of the specific measures being introduced from late next month relate to so-called portfolio landlords – those with four or more rental properties – but many analysts believe the overall effect will be to tighten lending across the buy to let sector.

The NLA’s call comes as the proportion of buy to let re-mortgage transactions, as a share of the total lending market, has risen over the last few months and as a diminishing demand for new buy to let loans has driven many lenders to slash mortgage rates. 

New NLA research shows that landlords are already finding it harder to arrange mortgages, with 43 per cent saying the process has become more difficult since the beginning of the year.

Some 53 per cent report that they have had to provide additional evidence to support recent mortgage applications, including tax returns, cash flow forecasts, and business plans.

“Changes to buy-to-let taxation will eat away at many landlords’ profits and make it more challenging for them to manage their businesses. As a result, many are looking to limit their exposure to the changes, which is why we’ve seen a rise in re-mortgaging” says Chris Norris, NLA head of policy.

“However, the situation is due to worsen from September and while it may not be financially advantageous for everyone, if you’re considering re-mortgaging or expanding your portfolio then do so now to avoid any further difficulties” he urges.