Landlords may begin selling off rental properties when new lending rules are introduced this month, an agent has predicted.
London estate agent Portico is warning landlords to prepare for new mortgage application rules amid new requirements being imposed by the Prudential Regulation Authority (PRA).
The PRA rules require landlords with four or more properties to provide a full breakdown of their portfolio, a business plan, and cash flow projection to support a new application.
Under the new regulations, if a landlord wants to make an application for a buy-to-let-mortgage on a new rental property, the lender will have to look at their entire property portfolio when they decide what mortgage deal they can offer on a single property.
The regulations aren’t officially being introduced until September 30 but Mark Lawrinson, regional director for Portico, says many lenders are already enforcing the new policy.
He said: “As a result of the new buy-to-let lending changes, we may see a surge of rental stock come back on the market for sale as landlords look to offload their weakest performing properties in order to get further lending on more potentially profitable properties.
“The new rules could also have a knock-on effect on rental prices, as landlords look to cover any shortfalls or carry out works to a property to both increase the capital value and the rent, in turn improving the yield and the return.”
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