Nearly 3,000 Sign Up For Petition Against Buy to Let Mortgage Laws

by Property118.com News Team

15:59 PM, 19th December 2011
About 7 years ago

Nearly 3,000 Sign Up For Petition Against Buy to Let Mortgage Laws

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Nearly 3,000 Sign Up For Petition Against Buy to Let Mortgage Laws

Nearly 3,000 people have signed an online government petition against the regulation of buy to let mortgages under new European laws.

To be discussed in the House of Commons, petitions need to accrue 100,000 signatories. The petition is open until November next year.

Under the proposed European Union mortgage directive being discussed in Brussels, buy to let landlords will face the same mortgage rules as other homebuyers.

This shifts buy to let lending from an investment into mainstream borrowing.

The key change will be considering mortgages on affordability instead of projected rental income.

Banks and building societies will have to base their lending decisions on a landlord’s personal income with checks that disposable income after paying living costs and other bills leaves enough cash to pay the buy to let loan.

The proposal is a major change for the UK but will have little or no effect on the rest of Europe, which has much smaller property investment market.

Lenders and brokers are protesting against the directive on the grounds of the cost of implementing the proposals.

The draft directive goes before the European Parliament again early in January for a vote on more than a thousand amendments tagged to the legislation by EU committees.

Once the amendments are resolved, the final vote is expected before Easter with implementation in 2013-14.

The mortgage directive will also affect remortgaging existing buy to let lending as landlords will come under the same affordability rules, but will have no affect if a property investor has no intention of buying or refinancing.

“This petition is to express the strength of feeling and possible effects of such regulation, to urge the government to prevent this action to protect both British business and individuals’ rights,” says the government petition web page.



Comments

Rob

16:28 PM, 19th December 2011
About 7 years ago

Well if that gets agreed that's me and my 11 properties screwed! I've signed it! Thatll also be my lenders that are screwed because when rates go up and I can't remortgage because of the new Rules I won't be able to pay the mortgages.as the case will be for tens of thousands of other investors!

Mark Alexander

23:46 PM, 19th December 2011
About 7 years ago

I have signed the petition, please sign it if you haven't already and spread the words by sharing THIS article.

Link to petition below

http://epetitions.direct.gov.uk/petitions/22767

10:37 AM, 20th December 2011
About 7 years ago

Why doesn't EVERY letting agent contact their landlord clients advising them it would be appropriate to sign the petition!!!?

Mark Alexander

11:32 AM, 20th December 2011
About 7 years ago

It needs to be done and what a great way to communicate with their clients! Regular readers of property118.com News will appreciate how much attention is given by landlords to this topic. There is no better way for agents to connect with their clients and potential new ones in my opinion.

16:15 PM, 21st December 2011
About 7 years ago

Personally I agree with the EU changes as it will provide a much more stable mortgage market.  At present the highly geared and vulnerable buy to let market is an extreme danger to our banks, thus our economy and public finances.

Your petition signing seems to of completely run out of steam and at this rate highly unlikely to reach the required 100,000 members.

As for the UK having a far bigger rental sector than Europe I extremely doubt that.  Europe has a far greater tradition of renting than the UK and has far better tenant rights.  If anything the EU should go further bringing tenant rights to the UK.

Mark Alexander

16:22 PM, 21st December 2011
About 7 years ago

I have liked your post because I think it might inspire inspire more landlords to share this news and to get more signatures.

Jerry Jones

9:46 AM, 22nd December 2011
About 7 years ago

Buy to let mortgage defaults run at a far lower level than residential mortgage defaults - the lenders are actively seeking more investor business at the moment. Continental let properties tend to be far more often supplied by corporate landlords than in the UK, I understand.

I wonder if a move into a formal business structure would be possible and presumably banks would then be able and prepared to lend to those. I'd then worry about the CGT implications, if this move gave rise to a chargeable event.

Mark Alexander

10:43 AM, 22nd December 2011
About 7 years ago

Jerry, if the EU regulations on lending are imposed on the UK our banks will lend to Ltd. companies. The work around on CGT will be to lend to the company against personal guarantees of directors supported by mortgages over properties held in personal names. Simple? No not really. Workable? Definitely 🙂

12:12 PM, 22nd December 2011
About 7 years ago

Jerry Jones would you like to back up your statement about lower buy to let defaults?  Because from what I see it is the other way round.  As a percentage buy to let landlords are far more likely to default than residential owners.  This is the evidence that has been given to the treasury select committee and the principle reason why interest charges are higher on buy to let to cover the extra risk.   Some of the reason for this is home owners are more attached to their properties emotionally and more likely as a result to fight to keep it.  The other big reason is landlords who have been gearing leave them selves very exposed to downturns and can loose a whole portfolio rather than a single property.

Mark Alexander

12:23 PM, 22nd December 2011
About 7 years ago

Please provide a link to your information source

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