Buy to Let

Buy-to-let rules are putting the squeeze on large landlords | Money

Borrowing is becoming even tougher for those letting out multiple homes — will it still be worth doing?

Homeowners with four or more properties are facing extra regulationGETTY IMAGES

Buy-to-let mortgage rules will be tightened in October, when the latest set of regulations governing landlords kick in.

What is changing?

Criteria laid out by the Bank of England’s Prudential Regulation Authority (PRA), which helps to manage risk in the financial system, say that lenders should give an extra level of scrutiny to “portfolio landlords”, those with four or more mortgaged properties. “Lending to portfolio landlords is inherently more complex given the quantum of debt in aggregate,” the PRA says. Lenders have some scope for interpreting the PRA’s rules, but they are expected to ask to see a landlord’s full portfolio, including outstanding mortgages. Previously, they would assess a new mortgage in isolation and assume the other properties were self-financing. “Now you will have to…

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