Good evening / 04.12.08
Consumer Home
Consumer Home
06 April 2006
The new HMO licenses coming into force on April 6th will be unlikely to put people off taking buy-to-let mortgages, says a mortgage lender.
Around 59 per cent of landlords are already aware of the new licenses, shows research from Mortgage Express, which make licenses compulsory for Houses in Multiple Occupancy (HMO), with five or more unrelated tenants living there over three storeys or more.
Only a small proportion of properties within the buy-to-let sector are likely to be affected, reveals the company, although landlords should read up about the licenses to check they are not affected. Those who are affected will have to pay around £1,100 for a license, the cost of which will be determined by the local housing authority.
"We expect the impact of these changes on the buy-to-let mortgage industry to be minimal," said Andrew Moss, buy-to-let product manager at Mortgage Express.
"Lenders will have already adapted their underwriting criteria to mirror the changes and, as our research demonstrates, landlords are aware of the changes and are reacting accordingly."
However, broker Landlord Mortgages gave the legislation a cautious welcome, warning that the property market should not be stifled and that affected landlords may "feel the pinch".
Buy-to-let mortgage lending totalled £14.6 billion in the second half of 2006, with a record number of buy-to-let mortgages approved, according to statistics from the Council of Mortgage Lenders (CML). As with any mortgage, lenders who cannot afford repayments risk damaging their credit rating.
© Copyright Adfero Ltd
