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Tuesday, March 29, 2016

Bank of England Kiboshes Buy To Lets

The Bank of England is doing its best to put the kibosh on the buy to let market.

The FT reports that the Bank is tightening lending rules. New measures to restrain the market include subjecting loans to a stress-test scenario whereby mortgage rates rise to 5.5% and more stringent affordability tests which take into account the borrowers’ costs of letting out the property – including tax liabilities.

All very well and dandy, but realistically in the extremely unlikely event that rates rise to 5.5% in the next few years, any buy to let landlord who couldn't meet the payments would simply dump the property.

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