There have been calls this week in the financial services and mortgage broking community for mortgage advisers to be required to have an additional, specialist licence for advice on buy to let mortgages.
We have to say, we agree. A qualified mortgage broker may not have experience or knowledge of key aspects that may affect an application.
Our view: why we think specialist ‘buy to let’ knowledge, examinations and licences are needed
- Stamp duty rules have changed for additional property purchases – it is 3% higher for additional properties.
- Furnished holiday lets v normal buy to lets have totally different mortgage underwriting processes, council tax and business rates issues.
- Buy to let lending is becoming more complex as many lenders are moving into property ‘portfolio’ lending across a whole portfolio rather than just individual mortgages on each property.
- An individual’s personal tax position can affect the suitability and affordability of a mortgage i.e. there are in fact stricter lending rules for higher earners.
- Income tax expenses relief on mortgage and loan finance is in a period of change gradually reducing the amount of income relief avaialable on rental profits, in short higher earners will pay much more tax.
- Capital gains tax calculations may be different whether you are UK resident or overseas resident and indeed, there are then 3 types: straight line apportionment, rebased and total gain methods.