The Council of Mortgage Lenders (CML) have claimed that the government may be basing its decisions concerning the private rented sector (PRS) on 6-year old data.
The government has not updated its Private Landlords’ Survey for some six years – had it done so, say CML, it may have had a “better understanding” of the needs of the private rental sector.
Communications manager Bernard Clarke, is urging the government to “back off” from further reform of the PRS and buy to let with its seemingly punitive taxation and regulation. Clarke says the landlords have yet to come to terms with and absorb the effects of the latest series of tax changes which are likely to have significant implications for the PRS.
The stamp duty surcharge of 3% is being imposed on buy-to-let property purchases, and the first phase of the reduction in mortgage interest relief will bite, starting with a 25% reduction in 2016/7, ending with a 100% reduction to the basic rate of rate by tax year 2020/21.
Clarke thinks that the Bank of England’s Financial Policy Committee could impose limits on buy to let Loan-To-Value ratios, and the interest cover ratio, which assesses rental income relative to the cost of the mortgage:
“We believe that [tools to control buy to let lending] should only ever be used with great sensitivity, and preferably only after consultation and the publication of analysis and assessment of the likely effects”.
Article courtesy of LandlordZONE