From 30 September 2017 UK banks will be introducing more stringent criteria for experienced landlords before considering an offer of a new loan:

http://www.bankofengland.co.uk/publications/Pages/news/2016/073.aspx

Generally, this means that landlords with four or more mortgaged properties shall have to produce a business plan across their business before they will be considered for an additional loan on any single property.

A higher interest rate will be used to make calculations of affordability, termed stress testing (whilst uncertain, a Zoopla commentator suggests this may rise as little as from 5% to 5.5%).

And this measure builds upon further, recent measures:

The rental coverage requirement has been raised from 125% up to between 140%-145%.

HMRC is currently increasing landlord taxation with an interest relief cap of 20%, also changing the calculation from gross to net (the so-called Section 24 rule):

https://www.gov.uk/government/publications/restricting-finance-cost-relief-for-individual-landlords/restricting-finance-cost-relief-for-individual-landlords

This is happening progressively between 2017 and 2021.

HMRC further removed tax relief in 2016 (10%) on wear and tear costs for landlords letting furnished homes.

All of these things call for creative responses from buyers and sellers of rental investment property to keep profitability.

Under mortgage stress? Or just fed up with the worry?

Get in touch – maybe there are things that can be done to help!