Life for buy-to-let landlords is getting even tougher. Not only can they no longer claim tax relief on mortgage interest, but on top the latest interest rate rise they face new rules which mean that the owner of several properties applying for a loan to add to their portfolio must prove the viability of all their property holdings with their application.
This not only places a bigger administrative burden on them but could also incur substantial professional fees. It will be no fun for lenders either who will face a much bigger workload when deciding an application. The result is likely to be either an increase in the mortgage application fee or simply that many lenders will leave this sector of the market, thus reducing competition and potentially increasing rates.
In spite of the doom and gloom surrounding interest rates there is some apparently good news: Knight Frank predicts that London property prices will be 13 per cent higher in 2021 than they are now. “The supply of existing homes for sale through estate agents was near record lows earlier this year, while buyer demand is showing signs of rising,” it said. “This trend has increased focus on the delivery of new-build homes across the country. The number of new homes being built in remains some way below the number needed to meet current demand – not to mention the large historical shortfall.”