The Bank of England (BoE) is introducing new mortgage regulations for landlords. They will come into effect from the 30th September 2017.
It will mean that when applying for mortgages for new properties, most landlords with three or more mortgaged properties that they rent out, will need to give much more information regarding their existing properties, assets, income, liabilities and costs.
How will things change?
At the moment the majority of lenders focus mainly on the value and rental income of the property they are lending against when underwriting buy to let mortgages.
With the new underwriting requirements from the BoE, all lenders will need to collect and validate information regarding every property that the landlord has an interest in when considering their application. This will include collecting information on rental income, property values, mortgages and costs from each and every property the landlord owns.
The reason the BoE has asked lenders to change their approach is that they want lenders to have a full understanding of the financial circumstances of landlords with multiple properties and the impact that any new lending might have on their finances.