28 November 2019

Political parties have buy-to-let in their sights while lenders cut rates to attract business

The main political parties are clearly keen to attract the tenant vote, with party manifestos focusing on housing policy.

The Tories want to introduce a Lifetime Deposit, allowing tenants to transfer their deposits when they move properties, as well as confirming they will abolish Section 21 of the Housing Act. A Social Housing White Paper will also be introduced if the Tories get back into power, setting out further measures handing power to tenants and supporting the supply of social homes.

Labour, meanwhile, aims to restrict rent hikes and clamp down on rogue landlords. Open-ended tenancies could be introduced, along with a private renters’ charter seeing landlords face an annual property MOT with hefty fines if their properties are found to be inadequate.

While landlords who abide by the rules and maintain their properties should have little to worry about, these measures appear designed to make life more difficult for those investing in buy-to-let. Landlords have already had to cope with changes to mortgage interest tax relief, along with new regulatory measures, and it feels like yet another attack.

However, it’s not all bad news. With transactions in the residential space subdued but lenders still keen to lend, the rates on buy-to-let mortgages are getting close to those offered on residential deals as banks try to attract business. Santander, Virgin Money and Accord are among lenders who have cut their buy-to-let rates recently, as they look at their year-end figures and try to drum up more customers. As homeowners and first-time buyers increasingly opt for five-year fixes, lenders are having to look elsewhere to do business in the short term, cutting rates or tweaking remortgage criteria with more generous rental calculations on affordability for those landlords who stay put.

To check that your buy-to-let mortgage is still on track, speak to one of our brokers on 0333 222 6688.

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