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Property investors will face tough new mortgage affordability tests from next year which will result in ordinary investors being able to borrow far less towards their purchase.
The proposed rules follow the Chancellor’s concerns about “financial stability” and the ability for individuals to find profitable places to put their savings. This could mark the “beginning of the end of the middle class buy to let dream”.
Buy to let properties have already recently been targeted with higher rates of stamp duty land tax and the removal of tax relief on mortgage interest.
The Chancellor, Philip Hammond, and Theresa May are expected to come under pressure to ease the burden on savers with new tax breaks or government help in Wednesday’s Autumn Statement.
There are also plans to give the Bank of England extra powers, which will be allowed to intervene in buy to let mortgages by specifying how much landlords can borrow if they fear the market is overheating. The rules are due to be introduced in early 2017 and will mean, amongst other things, the Bank will be able to set out a minimum deposit landlords must put down.
If you have any personal legal questions related to this article, then, please get in touch with one of our experienced and specialist residential property solicitors in our Residential Conveyancing Department. We are able to deal with all conveyancing transaction efficiently and tailored to your needs.