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    Fair point, I suspect lenders will need to be inventive on product design should any dip in business levels cause issues on achieving business objectives but I doubt whether 20 yr Fixed Rates for BtL will be amongst them . (Famous last words)


      SNP to Introduce Total Rental Controls

      Thought those investing in Scottish property or interested in acquiring property for investment might be interested in the following news briefing.

      Delegates at the Scottish National Party Spring Conference have voted in favour of introducing national rent controls for all Scottish tenants.

      Should the SNP win a majority in the upcoming Scottish general election this could mean landlords are unable to raise rents above a cap set by the State, even when their own mortgage costs rise.

      The resolution goes much further than the local rent controls in the Private Housing Tenancies Bill which is going through final stages in the Scottish Parliament this week.

      Emma Saunders, an activist with campaign group Living Rent, said the vote meant there was now a “consensus” going into the upcoming Scottish Parliamentary election that far broader rent controls were “a necessary step to resolving the housing crisis”.

      She said: “For far too many private tenants in Scotland, rents are too high and the quality of housing too low. With this vote by SNP delegates, there is now a clear consensus across the board that rent controls are a sensible solution to this.

      “The challenge is now to make sure that we get it right and that the model of rent controls we introduce genuinely brings rents down and protects tenants.”

      The existing Bill will introduce “rent pressure zones” where rents can be capped for a period up to five years if Scottish ministers deem that rents have risen “too much”.

      Within rent pressure zones rent reviews for sitting tenants will be subject to caps of CPI + 1 + n where n is determined by ministers.

      However the latest move would potentially see this practice rolled out across the country.

      Mortgage lenders have already aired deep concerns about the practice and suggested they will be forced to review buy-to-let lending policies north of the border.

      In November last year a spokesman from the Council of Mortgage Lenders warned: “We are concerned that in setting fixed rents, some landlords may not anticipate all their costs and may therefore have problems in keeping up with their mortgage payments. There is also a risk that uncertainty over costs may lead them to set rents at too high a level, to the detriment of the tenant.”

      Ian Andrew, managing director of Nationwide’s group intermediary sales, said at the time: “Any reforms that protect tenants from unfair practice are positive, but we believe that any changes should balance the needs of tenants and flexibility of landlords effectively.

      “Our concern is that the current proposed changes could constrain investment in the private rented sector in Scotland and exacerbate rent inflation through a long term lack of supply. We believe more measured reform is necessary to improve the market, both for tenants and for landlords.”


        So not rent controls. But rent increase controls similar to Labours proposals in Engerland pre general election. All that will mean is if rents rise there will be a lot of contracts ended and new tenants taken on at the new market rate. So, bad for landlords with the hassle factor, and bad for tenants with shorter tenancies and hence increased removals costs.

        Edit... Just looked for a news link to post #47, and I find some. From Sep 15...............................


          Scotland clamps down on landlord rights

          The Private Housing Bill was passed into law by the Scottish Parliament last night reducing landlords' rights to repossess, end tenancies and raise rents in some areas.

          The Private Housing Bill was passed into law by the Scottish Parliament last night reducing landlords’ rights to repossess, end tenancies and raise rents in some areas.

          Under the new legislation landlords are no longer able to terminate a tenancy when the agreement reaches its contractual end, repossession grounds have been restricted and the government can impose a blanket cap on rents in an area if it deems them “too high”.

          Speaking about the bill Scottish housing minister Margaret Burgess said the policy would “rebalance” the relationship between landlords and tenants means tenants will feel “more secure in their homes”.

          She said: “This Bill ensures the end of a process in this parliamentary term that started with the publication of PRS Strategy in 2013, has included regulating letting agents and now culminates in this Bill.

          “These significant changes will transform the private rented sector, creating a more modern tenancy, bring stability to the sector and helping to meet Scotland’s housing needs.”

          Earlier this week delegates at the Scottish National Party Spring Conference voted in favour of introducing national rent controls for all Scottish tenants rather than just in zones as outlined in the Bill.


            PRA proposes reduction in Buy to Let Lending by 20%

            The following has been announced in the Mortgage trade news media .

            New PRA proposals regarding standards that firms should meet when underwriting buy-to-let mortgage contracts will "lead to a decrease in the number of cumulative new approvals for buy-to-let mortgages by about 10-20% by Q3 2018", according to the Authority's estimates.

            A PRA review found that firms are relaxing underwriting standards, "affecting their safety and soundness".

            To prevent a loosening in buy-to-let underwriting standards and to "curtail inappropriate lending and the potential for excessive credit losses", the PRA has proposed new rules.

            The PRA said that as a result, a reduction in buy-to-let activity and lower buy-to-let mortgage stock will lead to a reduction in short-term revenues for lenders and mortgage brokers. While affected firms may be able to recover some of the reduction in revenues by lending to owner-occupiers or other business activities in the economy, it admitted that some more affected firms may find it "difficult to recover lost revenues".

            The Committee added that some buy-to-let investors could see an impact on their ability to obtain a buy-to-let mortgage and/or the profitability of their lending activities due to higher deposit requirements. However, "affected investors may be able to find returns in other investment opportunities".

            The PRA is proposing that all firms use an affordability test when assessing a buy-to-let mortgage contract in the form of either an ICR test or an income affordability test.

            When assessing affordability, firms should "take account of likely future interest rate increases", and therefore should consider the likely future interest rates over a minimum period of five years.

            The PRA says it expects firms to have regard to market expectations and a minimum increase of 2 percentage points in buy-to-let mortgage interest rates.

            In a statement, the PRA said:

            "Even if the interest rate determined above indicates that the borrower’s interest rate will be less than 5.5% during the first 5 years of the buy-to-let mortgage contract, the firm should assume a minimum borrower interest rate of 5.5%."

            The PRA is also seeking to establish a standard definition of what constitutes a ‘Portfolio landlord’. Under this proposal, a landlord would be considered to be a Portfolio landlord where they have four or more mortgaged buy-to-let properties across all lenders in aggregate. Data gathered by the PRA shows that there is an increase in observed arrears rates of landlords with buy-to-let portfolios of four or more mortgaged properties.

            The PRA is expecting that firms conducting lending to Portfolio landlords do so according to a specialist underwriting process that accounts for the complex nature of the borrower and their portfolio of properties.

            As affordability constrains the value of the loan a firm can extend, the PRA is not proposing supervisory guidance with respect to specific LTV standards, but says it expect firms to have "appropriate controls in place" to manage the risks of higher LTV lending.


              Just noticed the Scottish rent control story - This is a massive worry for any Scottish landlord and will cripple you when inflation comes. This has already been tried with dire effects during the 70s in England. It was a complete disaster but I guess that's what happens when you vote in a bunch of Morons to run your Country. Scotland had one of the luckiest escapes in History remaining part of the UK, with the enormous fall in oil prices the country would of been bankrupt and faced a future no one would wish on them............................Nicola Sturgeons response is that she still believes you should of voted independence and if given the chance would take it tomorrow. These people have got to be one of the biggest laughing stocks in any modern economy, no doubt they will sweep to victory yet again.


                Paragon to make changes to criteria for lending to Limited Company's

                Paragon have made changes to their lending criteria for limited company landlords in the wake of recent Government announcements regarding tax relief changes. The exclusive lender restriction for limited company landlords has been removed which, where their criteria are met, will allow landlords with portfolios to fund properties in the vehicle company with more than one lender From this month they are also enhancing their buy-to-let affordability assessment. This will include a modelling of future affordability taking into account market expectations for interest rates going forward and future rental levels.


                  72% of Pensioners would struggle without rental income from their Buy to Let

                  72% of pensioners would struggle without BTL income
                  By Rozi Jones 15 Apr 2016

                  Almost three quarters (72%) of pensioners who have an investment property said they would struggle to make ends meet if they didn't have the income from their buy-to-let, according to Responsible Equity Release.

                  Eight out of ten (81%) pensioners who own a buy-to-let said their properties provide an important, even vital, boost to their retirement income.

                  More than nine out of ten (92%) are worried about the changes to mortgage interest tax relief and the impact on the profit they make from their investment property.

                  The buy-to-let tax changes coming into force have left many pensioner landlords considering whether it’s worth holding onto their buy-to-lets at all. Four out of ten (41%) said although their buy-to-let property was a valuable income generator, they are now thinking seriously about selling it.

                  Steve Wilkie, managing director, Responsible Equity Release, commented:

                  "For many pensioners, having a buy-to-let property has been a life saver in this low interest environment. While their savings have languished, earning very little interest, and pension income has been hit hard by falling share prices, property income has remained strong.

                  “Without the income boost from their buy-to-let, many would really be struggling to make ends meet. But the Chancellor has yet again ignored UK’s retirees when he announced changes to the way buy-to-let would be taxed.

                  “George Osborne was so focused on taxing the rich, he forgot that a new tax on buy-to-let won’t just hit the wealthy, it will also hit those honest, hard working people, who may have a single buy-to-let property, and were just hoping it would earn them a little extra income in retirement.”


                    Kensington Mortgage and Short Leases

                    In view of recent postings on short leases I would advise that Kensington Mortgages will consider mortgages both residential and BtL where the lease has a minimum of 35 years remaining after the expiry of the mortgage term.

                    I make no personal endorsement of this lender and cite this element of their criteria to aid those who are frustrated at the normal criteria of other lenders relating to what is acceptable on the period remaining on leasehold property.


                      The idiocy of the Basel 3 Proposals

                      Here is an article which highlights the perverse rationale of the EEC towards how mortgages are to be assessed not only for the lenders but more importantly prospective borrowers.

                      Housing associations and homebuyers with small deposits are among those likely to bear the brunt of new proposals from the Basel Committee to revise its standardised approach for credit risk, IMLA has warned.

                      The Basel framework ensures that banks, building societies and other deposit-taking institutions have sufficient capital for the underlying risks they bear. However IMLA says that the proposed revisions could limit access to mortgage finance in key areas of the UK housing market.

                      It says that one of the most serious impacts could be on lending to UK housing associations. By preventing lenders from taking into account borrowers’ financial strength, the Basel proposals could see loans to many housing associations redefined and subject to much higher capital requirements, despite the exemplary payment track record and their government regulated status.

                      The same proposals mean the regulatory cost of buy-to-let lending could far outweigh the risks involved, as they do not accommodate the fact that many BTL borrowers are substantially more financially secure than the average owner-occupier.

                      IMLA also strongly disagrees with proposals which could distort mortgage pricing and push up the cost of higher LTV mortgages. It says this could cause first time buyers to seek out unsecured ‘top-up’ loans to fund their house purchases with a lower LTV mortgage, which would be potentially harmful to their finances.

                      IMLA added that the proposals could create a “bizarre” situation where unsecured lending can be given a lower risk weighting than secured lending to the same borrower. It believes they could also penalise lenders that have adopted conservative lending standards and create an artificial incentive to lenders to remortgage or ‘churn’ customers.

                      Peter Williams, Executive Director of IMLA, commented:

                      “It is vital to have the right checks and balances in place so lenders can provide mortgage finance where there is a legitimate need while maintaining a stable UK housing market.

                      “The Basel consultation sets out with the important aim of ensuring capital requirements are appropriate to the underlying risk, but we are concerned that the current proposals will not meet this goal.

                      “Government and industry need to work together to bring greater balance to the UK housing market. This includes ironing out the technical details of the Basel proposals to defend consumer interests across all housing tenures.”


                        New BTL underwriting rules to cause surge in activity

                        By Rozi Jones 28 Apr 2016
                        New BTL underwriting rules to cause surge in activity
                        Fleet Mortgages believes the introduction of new underwriting rules for buy-to-let lenders by the PRA could spark a "significant increase in market activity" as landlords seek to secure finance pre-intervention.

                        The new rules are expected to mean lenders have to impose stricter affordability measures on applicants resulting in a reduction in the amount buy-to-let landlords can borrow.

                        Fleet Mortgages anticipates the new rules could be introduced as early as January 2017, and landlords and their mortgage advisers may well treat the intervening period as they did the months prior to the introduction of the stamp duty changes on the 31st March.

                        Fleet also believes mortgage advisers will be briefing their landlord clients throughout the course of the year of the likelihood of stricter underwriting criteria impacting on the loan amounts achievable.

                        Fleet Mortgages believes ‘portfolio landlords’ – defined as those who own four or more properties – may be the group most affected by the intervention because of the PRA’s proposed rule that lenders must adopt a specialist affordability assessment for them. It believes this could precipitate a growing number of portfolio landlords to secure their mortgage finance in 2016 rather than waiting until 2017.

                        Bob Young, Chief Executive Officer of Fleet Mortgages, commented:

                        “Many have suggested that the recent stamp duty deadline is the only one facing the buy-to-let sector and market activity will now wither on the vine as landlords take stock of their positions for the foreseeable future.

                        “The recent PRA consultation on buy-to-let underwriting actually makes it more likely that we will see activity levels begin to increase again over the course of the year as we get closer to the implementation of the rules. Certainly, given their intention to drive down the amounts buy-to-let landlords can borrow, it would be logical to think existing landlords seeking to remortgage or capital raise or both, will make the most of the current market conditions which will allow them to borrow at higher levels.

                        “Once the new rules kick-in, landlords and their advisers may well find their ability to secure the money they want has been compromised by the stricter underwriting criteria imposed on lenders, plus of course the likelihood that increased capital requirements will also impact on lender’s ability to offer the same levels of funding. It all adds up to the potential for renewed vigour in the buy-to-let sector, especially for those who may be deemed portfolio landlords, given the special affordability requirements they will face next year.

                        “Our advice to advisers is to make sure any clients with these circumstances are contacted and they are made aware of how the lending landscape might change in 2017. Those in a position to make their new mortgage arrangements now are likely to find a much more hospitable lending environment, rather than waiting for lenders to implement these new rules and ultimately for them to end up disappointed.”


                          Interestingly Lloyds bank are actually starting to now push BTL mortgages, I was approached by them when I popped in to the bank. this is a new approach as they did not really push this previously. I said as much to the manager and she told me they have been told to try and push them. Not sure what your thoughts are loanarranger? Have you noticed Lloyds?


                            Hi Hech123

                            I suspect that the Lloyds group are experiencing like a number of lenders a marked reduction in the flow of new business following the lead up to and post April 1st. Their profile has been markedly towards the small investor and indeed most run of the mill brokers gravitate to either BM or TMW for the first two or three mortgages given the relative simplicity of their underwriting. I suspect that novice landlords are taking a rain check to see what develops over the short term thereby contributing to the reduction in new business. Therefore I can see no other reason why Lloyds and its associated entities are being proactive unfortunately for experienced landlords like yourself I assume that the limit of 3 BtL properties has either been reached or indeed exceeded if borrowings were effected pre credit crunch.


                              Yes I am with Lloyds on a commercial basis but this person did not know that. I just found it interesting they were approaching me as this had never happened before


                                I bet you needed a large scotch to get over the shock; clearly you are a man of substance to be feted by your bank.


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