Tough new lending requirements for landlords

The Bank of England's Prudential Regulation Authority (PRA) will announce new lending requirements for landlords in the coming weeks. Under the new lending requirements for landlords, to be announced by Bank of England's Prudential Regulation Authority (PRA) in the coming weeks, landlords will have to show that they can provide rental income of 145 per cent of their mortgage payments – up from 125 per cent – and at stress rates of 5.5 per cent – up from 5.25 per cent. This crackdown on buy-to-let will hinder first-time buyers, as they will  priced out by larger, professional landlords once amateur landlords are forced to sell. According to a spokesman for the Council of Mortgage Lenders buy-to-let lending "is set to remain subdued as investors adjust to tax changes and the prospect of stricter affordability tests. This has already affected new purchases, but the full effects will not be fully understood for some time."

If you are a landlord with properties with significant mortgages or loans, you could soon see a major increase in the amount of income tax you are expected to pay. Contact Steve Govey or your usual Beavis Morgan Partner if you would like to explore your planning options in more detail.