The Prudential Regulatory Authority (PRA) has recently announced regulatory changes to the way that lenders assess Buy-to-Let mortgage applications. These changes will be implemented by lenders before January 2017 and will make it more difficult to secure a buy-to-let mortgage.
Going forward, lenders will require rental income to cover 125% of the mortgage repayment amount and will conduct a ‘stress test’ that assumes an interest rate of at least 5.5% However commentators are speculating that some lenders will push this figure to 145%. Visit: http://www.bankofengland.co.uk/pra/Pages/publications/ss/2016/ss1316.aspx to learn more.
Khan calls for investigation into foreign investment
London Mayor Sadiq Khan has announced he will conduct a major investigation into the impact of foreign investment on London’s housing market. “It’s clear we need to better understand the different roles that overseas money plays in London’s housing market, the scale of what’s going on, and what action we can take to support development and help Londoners find a home,” Khan explained.
Help to Buy closes
The Government’s Help to Buy mortgage guarantee will close for new loans at the end of December 2016. Since it started in October 2013, a total of 86,341 properties have been funded (up to June 2016) with a combined value of £13,545m. Just 5% of the properties were located in London.
The £11,000 cost of moving
The average cost of moving home in the UK has increased by £870 (9%) over the past year to £10,996 according to research from the Halifax. Moving costs in Greater London increased by £4,732 (18%) over the past year, more than five times the national increase taking the average moving cost in London to £31,416.
Children challenging parents’ wills According to law firm Hugh James, children are increasingly taking legal action to challenge their parents’ wills as rising property prices have swelled the value of estates. High divorce rates and re-marriages are also contributing to the rise in litigation regarding inheritance.