George Osborne’s recent budget has sent shock waves through the mortgage market.
He said that that the interest relief currently received by buy-to-let mortgage holders, which sees landlords offset the interest they pay on their mortgage against the rental income that they receive, will gradually be reduced over the next few years.
Whilst this was undoubtedly a shock to landlords, it will also bring relief to first time buyers who are currently struggling to get onto the property ladder due to the competition with potential landlords who snap up starter homes.
Currently, buy-to-let mortgages are not regulated by the Financial Conduct Authority (FCA) so landlords could also see a difference in lending policies if George Osborne were to hand the buy-to-let mortgage power over to the Bank of England.
The governor of the Bank of England, https://www.beaconfinancialtraining.co.uk/wp-content/uploads/2020/06/cemap-online-and-classroom-training-uk.jpg Carney, has previously advised that the buy-to-let bubble could soon burst, as potential rate increases could leave many landlords to maintain their repayments.
It is thought that the Bank could get approval to be more stringent in assessing buy-to-let lending. They could implement tighter lending requirements with regards to affordability, rental income required and deposit needed to make the mortgage application a viable proposition.
It will depend on your employer’s product range, once you have passed your CeMAP training, whether or not you are able to advise on buy-to-let borrowing. You will work within the constraints of your employer’s policies and procedures as well as the regulation set by the Financial Conduct Authority (FCA), in order to remain complaint and offer your customers the best and most suitable advice.