Labour landlord rules ‘could hit BTL lending’
Experts are warning Labour’s crackdown on bad landlords in the private rented sector could have a “massive” impact on buy-to-let lending.
In its policy review last year, Labour proposed a national register of private landlords.
Landlord licencing exists in a number of councils, such as Newham, where landlords face big fines unless they comply with tough rules.
The Royal Bank of Scotland already refuses to lend on licencing schemes highlighting concerns over property re-sale values and the impact on house prices.
An RBS spokeswoman says: “As a responsible lender, we would not consider releasing funds on a property where an amateur landlord may find it difficult to comply with regulation and subsequently to let or sell.”
National Landlords Association policy adviser Chris Norris says landlords would have “very, very severe” concerns about Labour’s proposals.
He says: “We could see a return to the lending policies of a few decades ago when returns were not as secure as they are now. That could have a massive knock-on effect on the ability of landlords to access finance and provide homes.”
Buy-to-let consultancy Lettingfocus.com owner David Lawrenson says: “Labour’s plans would reduce buy-to-let lending. A lot of councils are introducing licencing schemes without thinking through how it would actually work.”
The Buy to Let Business managing director Ying Tan says: “It is frustrating that the buy-to-let sector is now back on its feet following the credit crunch, and now politicians want to intervene with red tape.”
Labour declined to comment.
Article courtesy of Mortgage Strategy