Consumer buy-to-let won’t make much difference

Mortgage Introducer

October 29, 2015

In January the Treasury defined consumer buy-to-let as any buy-to-let contract in which the borrower has not entered “wholly or predominantly” for business purposes.

Seven in 10 (70%) brokers don’t expect the MCD to impact the amount of buy-to-let business they transact and 12% anticipate doing more. Just 17% worry that it will cause them to do less business.

Three quarters (74%) of intermediaries said let-to-buy constitutes no more than one in 10 mortgage applications, while more than half reckoned it represents less than 5% of their buy-to-let business.

John Heron, managing director of mortgages at Paragon, said: “Preparing for MCD represents a significant investment for most lenders and intermediaries.

“The view of industry bodies such as IMLA however, is that the changes are likely to be of little benefit to consumers and landlords alike.

“The new classification of consumer buy-to-let is a case in point, with the new regulations covering only a small proportion of buy-to-let lending the real risk is that many lenders will not bother with this class of buy-to-let at all.”

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