Fixed-rate products may alleviate BTL stress-test fears

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.”