It is going to happen. The buy to let industry is going to get regulated. This means:
Buy to let mortgage lenders will have to comply
Businesses within the industry (like mine) will have to comply
Do I think it is a good idea? Well I am not sure. There is definitely an argument that buy to let is not just practised by hard nosed business people and hence some consumer law should kick in. But then on the other hand should buy to let be left to be played by hard nosed business people due to the amounts of debt that needs to be taken on?
I am undecided on this one. I am just very interested who they will come after. Lenders will get a tough time and we will see current borrowers benefiting from the regulation. So if you have any buy to let mortgages you can be pleased. If you do not then I advise get in quick.
If you want to expand then I reckon 75% LTV will be the maximum you will be allowed to get. I think once regulation kicks in over leveraging in their eyes will be halted. Shame. It was over leveraging that made me rich!
What this will mean is that 25% BMV will always need to be sought. Property prices are heading for a very flat season. That is to say the bread and butter properties will see no real growth for the next couple of years maybe more. But the great thing is will be the fact that out of the stability of prices mean a consistent period of buying!
In other words there will be a small, consistent, ready supply of deals from desperate sellers which will feed the mouths of hungry landlords who wish to stay in the game. Is that you? I think it will be possible to build large portfolios for those who are persistent in their goals of achieving a cashflow positive portfolio to match their target income.
Lets see what the future brings. If you want to get in before the regulation have a chat with my team by calling 0870 990 3205.
Ajay
Posted on: 27th Nov 2009
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