The government crackdown on buy-to-let could leave people with nowhere to live, BM Solutions head Phil Rickards has warned.
Speaking on a panel at FSE Cardiff today, he said: “We need to be careful how much pressure is being placed on the housing market.
“This could impact a lot on the private rental sector, and we’ve already seen the decline in social housing. We could be leaving people with nowhere to live.”
He added that the buy-to-let market is “not one that’s out of control”.
Ian Andrew, managing director of intermediary sales at Nationwide Building Society, reckoned the Prudential Regulation Authority consultation on underwriting standards in the buy-to-let sector will have far reaching consequences on buy-to-let lending.
He said: “We’ve seen a tightening of criteria and a tightening of stress rates which is already resulting in a drop in case numbers.
“After the consultation period every lender that hasn’t already moved, will have to move. This will create buy-to-let mortgage prisoners – some of them will find it difficult to remortgage.”
John Coffield, head of Paradigm Mortgage Services, was baffled by the government’s continued focus on the private rental sector.
He said: “It’s odd because we see the PRS as part of the solution, not part of the problem.
“I think lenders need to send out clear messages to brokers about helping them through this maze.”
Rickards and Andrew were asked about their plans on limited company buy-to-let.
Andrew said: “It’s something we’re still looking at. It’s very capital intensive for us and we have nothing planned at the moment.”
And Rickards said: “We’re definitely looking at it but we want to do it in the right way.
“To be honest we’ve been distracted by the PRA consultation and we have to prioritise our work streams.”