Which? says new mortgage constraints will hit buy to let

The consumer organisation Which? has joined the chorus of concern that new mortgage restrictions may hit buy to let landlords.

Since January 1, mortgage lenders have subjected landlords to stricter lending criteria imposed by the Prudential Regulation Authority, which oversees this market. 

Affordability tests for buy to let mortgages are now based on a hypothetical mortgage rate of 5.5 per cent, which may hamper many landlords' opportunities to take advantage of new low rates offered by some lenders.

David Blake, of Which? Mortgage Advisers, says: “Buy to let investors will be able to borrow less than they could have previously. [But] buy to let interest rates are as competitive as they have ever been, with many lenders relaxing their stress tests if the borrower opts for a five-year fixed rate.”  

Which? has also confirmed a recent Moneyfacts report - covered by Letting Agent Today - suggesting that while landlords could benefit from falling rates, the total range of mortgages available to them is declining. 

Some 74 buy to let mortgage deals were withdrawn from the market in December 2016. The majority of these deals were in the 75 per cent loan-to-value sector, which is typically the highest LTV that lenders will offer on buy to let mortgages. 


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