Mortgages  

Lending restrictions could hit buy-to-let: Kinnear

The managing director of Landlord Assist, which helps property investors build their portfolios, warned that apply limits on loans-to-value in the buy-to-let market risked damaging the supply of rental properties.

Mr Kinnear said: “The banks are being asked not to provide a loan of greater than 4.5 times income for the vast majority of their loans and being asked to stress test applications to see if people can afford the mortgage if interest rates were to go up by 3 percentage points.

“While this is in place for the owner occupier market we can see a situation where this is, in some form or another, extended to the buy-to-let market as well.

“Clearly, we do not advocate landlords taking loans out which they can’t afford when interest rates go up but it is important that the income those properties generate is included within any affordability calculations.”

Adviser view

Ian Currie, director of Manchester-based Seneca Partners, said: “It will take more than one month of positive lending figures to turn round the oil tanker. The high street banks remain deeply wary of lending.

“Ever since the financial crisis, many high street bank managers have turned risk aversion into a mantra. Despite the cheap cash made available to the banks under the Funding for Lending scheme, the conventional credit pipeline is still blocked.”