Industry experts have predicted complex buy to let lending is very likely to increase following the introduction of tougher underwriting standards under new guidelines.
The latest (PRA) Prudential Regulation Authority changes, will put the above into place for portfolio landlords with four or more mortgaged buy to let properties, and will come into force from October. The changes are designed to ensure better standards of business, driven by more responsible lending to create a more professional sector.
It has been forecasted that there will be an 8.4 million rise in the UK’s population over the next 22 years, eventually reaching 74 million in 2039-this will signal the need for more private rented homes. This growing demand for housing will need to be met which will then enforce opportunity for this new professional type of landlord. We have already seen changes in the buy to let market, with more portfolio landlords looking to invest in the different types of properties such as HMO’S or semi commercial property.
It has been said that because of the complexity of these situations, mainstream lenders may be reluctant or unable to provide funding, and some predicting they may leave the market altogether. However specialist lenders in the market are in a great position as they have a team of underwriters in the field with great expertise of the market, and are well prepared for the coming regulatory changes.
Regardless of the changes the Buy to let market will continue to evolve and lenders will continue to have great confidence and proceed to launch specialist products. If you would like to speak to the Key Commercial Finance team with regards to Buy to Let then please do not hesitate to get in touch.