New stamp duty rules annihilated buy-to-let mortgage borrowing in January - City A.M.

New stamp duty rules annihilated buy-to-let mortgage borrowing in January – City A.M.

The number of homeowners in the United Kingdom leveraging their homes with mortgages has fallen over the year, due to increased regulation regarding buy to let homes. The figure has been lower by sixteen percent over the year due to the regulations. As a result of these regulations as well, landlords are having to increase rents on their properties, subsequently constraining renters who will have to strain their budgets to be able to afford to rent property.

Key Takeaways:

Last April stamp duty on buy-to-let homes increased by 3%. Landlords are also no longer allowed to claim interest rate relief on mortgage payments.
Less people are trying to obtain a mortgage for a buy-to-let property.
The number of remortgages increased, mostly due to parents trying to help their children finance a home purchase.

“Buy-to-let house purchase activity continues to be weak, despite strong buy-to-let remortgage levels. This will likely remain so going forward as lenders tighten affordability criteria ahead of the PRA mandated stress tests, and the introduction of tax changes in April.”