As a landlord and broker I've never known such frantic activity as has been seen in the first quarter of 2016. We've had a combination of events that have resulted in a frenzy of buying to beat the upcoming Stamp Duty (SDLT) increase, amended criteria, increased rental calculations and now lenders accusing each other of irresponsible lending. More on that later, but it's going to be an interesting year if you are looking for a BTL mortgage.
Lenders spent most of 2015 getting ready for the Mortgage Credit Directive (MCD) which was launched in March 2016. Surprisingly, coming from Europe, it will affect borrowers in several ways. Now that it is done the lenders can get back to the job of creating new products and improving service which for some needs to be a priority.
MCD has been one of the biggest changes to BTL mortgages for several years but what does it mean for you?
For most people all you will see is a changed mortgage illustration with more information. Some accidental landlords - which varies from 5% to 10% of the market - will also go through the same regulation process as if it was their main residence. Lenders offers will have to be binding and a reflection or cooling off period of seven days is also being introduced.