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Buy-to-let landlords face double deadline

February saw the second highest monthly total of house purchase approvals since January 2014 as buy-to-let investors raced to meet April's stamp duty surcharge deadline.

Investors face a double deadline, with the upcoming EU Mortgage Credit Directive (MCD) set to toughen parameters for buy-to-let borrowing later this month.

House purchase approvals totalled 72,799 last month, a rise of 17.4% on 62,007 in February 2015, according to the latest Mortgage Monitor from e.surv.


February’s total easily beat the average 71,173 approvals seen across the previous six months, in spite of a monthly 2.4% drop from 74,581 granted in January 2016.

E.surv said the “buy-to-let burst” was down to both the 1 April stamp duty surcharge and the MCD, which comes into force on 21 March.

Tougher MCD mortgage application rules include a more arduous application process and harsher means testing for consumer landlords.

Richard Sexton, director of e.surv, said: “The clock is ticking for buy-to-let investors. Over the next couple of months, stamp duty and the MCD could both make their mark.

“February lending reflected this powering last month’s overall strong performance for both buy-to-let and first-timers.

“For buy-to-let investors, the race really has been on to beat both pieces of legislation.”

Sexton said that some concerns about the changes are overly pessimistic. “Before the implementation of last year’s new MMR rules, uncertainty was rife among both borrowers and lenders but the reality wasn’t as dramatic as predicted by many.”

First-time buyers also enjoyed an upbeat February as the proportion of small-deposit lending climbed to 15.7%, with 11,429 loan approvals granted.


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