Complex Buy To Let
Fixed-rate products may alleviate BTL stress-test fears
Guest Author:
Rebekah CommaneStress test issues relating to buy to let, mooted by the Financial Policy Committee, could be avoided if more lenders offered longer-term fixed-rate products, according to an industry figure.
The Bank of England’s Financial Policy Committee warned that surging levels of lending to landlords pose a risk to the property market and financial system.
However, Foundation Home Loans’ commercial director, Simon Bayley, believes that concerns could be alleviated with an expansion to the range of fixed-rate products offered.
Bayley said the ability to match mortgage repayments with rental charges over longer periods, provides a degree of certainty with fixed rates that pay rate mortgages can’t offer.
“The FPC is right to look at underwriting standards and stress testing in buy-to-let”, said Bayley.
He added: “With more new lenders coming to market it is important that we all work to high underwriting standards, not compromised by the need to gain market share.”
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