Worried about this, as i want to get into BTL & make LOTS of ££££'s

newDude

EU regulation of buy-to-let mortgages could be 'disastrous'
EU draft directive on Credit Agreements Relating to Residential Property (CARRP)

New EU legislation, being brought in to deter ‘irresponsible lending’, is due to be voted on early in the new year and to come into effect in 2013.

At its heart, the EU draft Directive on Credit Agreements Relating to Residential Property says buy-to-let mortgages should be regulated in the same way as residential mortgages.

This would prevent lenders from taking anticipated rental income into account when deciding the amount of the loan.
The EU proposals, which would bring Britain into line with Continental practice, would force lender to assess buy-to-let borrowers in the same way as mortgage applications by owner occupiers – ie, on earnings and the size of their deposit.

Currently, rental income is treated as unearned income, so would not count in calculations. Paul Broadhead, head of mortgage policy at BSA, said: “If rental income is excluded from consideration when underwriting BTL, then the availability of new borrowing could cease fairly rapidly. In addition, those with existing buy-to-let loans may well be unable to refinance.

“Over time this could lead to a reduction in private rented sector properties. At the extreme, current BTL borrowers may be forced to sell their property portfolios, which would have obvious implications for existing tenants and the housing market as a whole.”

EDIT, here's the link:
http://blogs.telegraph.co.uk/finance/ianmcowie/100013206/new-eu-mortgage-rules-could-hit-house-prices/

shortchanged_2

This sounds like a fantastic piece of legislation coming from the EU for a change. About time to. The UK housing rental market needs to be reigned in.

brit1234

Good news, well done Europe.

It will stop people borrowing millions without little resources themselves, it will make for a more stable economy.

nollag2006

Duplicate thread:
https://forums.moneysavingexpert.com/discussion/3606467

Do keep up chaps.

The overall view is that this is something that would not be in the best interests of either homeowners or the government, and so is extremely unlikely to see the light of day.

shortchanged_2

nollag2006 wrote: »

Duplicate thread:
https://forums.moneysavingexpert.com/discussion/3606467

Do keep up chaps.

The overall view is that this is something that would not be in the best interests of either homeowners or the government, and so is extremely unlikely to see the light of day.

Didn't notice the old article.

Anyway the UK government may not have any say in the matter nallog. So you might find you have to grin and bear this well overdue piece of legislation from the EU.

shortchanged_2

After reading the article fully it appears that there is some serious sphincter twitching from the house ramping brigade.

Is your sphincter twitching nallog?

brit1234

Nollag try some of this:


or


On a serious note Nollag how would this effect your Hounslow buy to lets?

Pimperne1

brit1234 wrote: »

Good news, well done Europe.

It will stop people borrowing millions without little resources themselves, it will make for a more stable economy.

Before you get into BtL I would suggest you practise transcribing information across from one site to another. It would be a pity if your BtL dealings were as hit and miss as the data in your signature.

http://www1.landregistry.gov.uk/upload/documents/HPI_Report_Sep_11_sb5ar16.pdf

Turnbull2000

Don't fret OP. It'll not happen here. The property and BTL market is considered way too important by the government. The lenders, BTL groups and developers have the ears of the government, and they'll be screaming into them every day until this is inevitability blocked.

Pimperne1

I'm not sure they every really took the income from the property into account when lending anyway (although they always insisted that the rental income be at least 125% of the mortgage repayment).

As I have recently retired I was interested to see whether lenders would continue to lend to me as I have significant income from rent and my mortgage advisor said this:

"Most BTL lenders now require a minimum income of £20k and upwards, but rates that would be available to you, dependent upon the potential BTL income of the property would be....."

They might well take into account existing BtL income but for them to lend on the basis of the rent you expected to receive was not the way it worked.

Aberdeenangarse

nollag2006 wrote: »

The overall view is that this is something that would not be in the best interests of either homeowners or the government, and so is extremely unlikely to see the light of day.

The overall view is that you keep telling porkies