The decision by MEP’s to remove Buy-To-Let mortgages from the scope of a new EU Directive has been welcomed by a host of property professionals including the Residential Landlords Association (RLA) and Legal 4 Landlords.
Under the original European plans, mortgage lenders would no longer have been able to take account of rental income when considering whether to lend to a landlord for a new property, despite the fact that there are specialist insurance products that can guarantee the rent.
The European Parliament committee looking at the Directive has decided that buy-to-let mortgages would be taken out of its scope altogether, after a great deal of high pressure lobbying from a number of sources including the RLA.
Alan Ward, Chairman of the RLA responded to the EU announcement saying: “Today’s decision by MEPs represents a common sense solution to a measure that would have crippled the private rental market in the UK. With a chronic shortage of properties in the sector, the initial proposals would have exacerbated the problem still further, causing further difficulties and higher rents for those looking for rental accommodation.”
Sim Sekhon, spokesman for specialist landlord services provider, Legal 4 Landlords also commented on the decision “It’s good to see that sense has prevailed within Europe, now landlords can get on with providing quality housing for tenants in the private rental sector without worrying that they were going to lose the right to expand their property portfolios. The EU decision to exempt Buy To Let mortgages from the firing line is good business for UK landlords. Rental income is the lifeblood and there are steps for landlords to take to ensure that cashflow remains constant, such as using comprehensive tenant referencing services to make sure you accept the right tenant and rent guarantee insurance to provide a guaranteed income. Having a secure income is vital for any business and property is no exception”.