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Buy-to-let landlords warned about forthcoming tightening of lending rules

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Written by: Bristol Post | Posted 10 October 2016 15:15

Buy-to-let landlords warned about forthcoming tightening of lending rules

Bristol’s growing number of buy-to-let landlords will find it more difficult to borrow money from January unless they have got their figures just right, according to one of the city’s property entrepreneurs.

But Susannah Cole of The Good Property Company based in The Paintworks, Bath Road, said that those who succeed at making money from property always have to be ready to adapt to a fast-changing climate.

Lenders have until January 1 to introduce tougher new requirements for buy-to-let borrowers, under a deadline set by the Bank of England. Lenders will demand that landlords have higher levels of rent relative to their mortgage costs and will stress-test mortgages to ensure landlords could still pay if the interest rates rise up to 5.5 per cent.

Susannah, whose company runs mentoring sessions for those becoming buy-to-let landlords, said: “Good potential landlords would already have stress-tested their borrowings to those sort of levels as part of their calculations.

“But there is a danger that landlords could find themselves trapped as  ‘mortgage hostages’ on some properties - unable to move to a new better mortgage if they can’t satisfy the new criteria after January.

“Those with a portfolio should stress-test now to identify which, if any, of their properties could be affected.

“In Bristol there is strong demand for rental property and a strong growth of rent levels, so these new rules are unlikely to hit the majority of landlords hard. It is an issue for those just about to invest in property as it will mean lenders will look harder at the figures, which will have to be right.

“Behind these changes are the Government’s tougher tax laws on landlords’ income which will be phased in from next April. Those who will be most affected are those who rely on buying and selling to make their money, borrowing to the maximum and looking at thin margins between rental income and lending outgoings until they get the major return through capital growth.

“That is always a difficult game to play and it is better if people are committed to being landlords and play a longer game, making a good return all the way through the transaction.”

Susannah started The Good Property Company in 2011, as a kitchen table start up. Since then she and her team have sourced, bought, sold or let out more than 200 properties in the greater Bristol area, with a value of £45 million, and an agreed purchase price of £30 million.

She said: “The key is to have good help and advice all through the process and make sure that your head rules your heart when buying property.”

Details of rental property mentoring in Bristol can be found at

  • Pictured: Susannah Cole


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