Is Property Investment Becoming a Rich Person’s Game?

Mortgage lenders have been quietly and arguably making it more challenging for the average landlord, as they continue to impose tougher checks and criterion on buy-to-let mortgages.  Leading to the question, is property investment becoming a rich person’s game?

Barclays Bank have followed the lead of building society and second-largest lender in the UK, Nationwide and tightened their mortgage lending criteria, meaning that the minimal rental cover which is now required has increased from 135% to 145%.

Experts predict that this decision could provoke a domino effect with many other lenders following suit thus making it more difficult for thousands of landlords to get mortgages.  It seems these decisions have originated from consultation with the Bank of England who has said that they may consider forcing lenders to take into account other costs for landlords, such as fees and tax, when deciding whether they should lend them money for property.

This means moving forward that landlords will actually begin to pay tax on their turnover, and not just the profits which is likely to hit higher-rate tax paying landlords more harshly.

So in putting all of this together with the changes to lending criteria it is very likely that becoming a landlord or increasing your portfolio could become a game reserved for the rich.

Take a listen to learn more about the implication of some of the changes.

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