Godiva Mortgages tightens criteria

The move comes hot on the heels of a Bank of England report which suggested it may intervene in buy-to-let lending. This could mean new affordability rules or lending caps.

How about immediately introducing BTL 50% maximum LTV for all new property purchasing but at the same time abolishing the ridiculous S24!?
I despise this S24 tax but would have no problem at all with being required to have 50% 'skin in the game'
Of course BTL lenders wouldn't like that as lending would de facto reduce to almost zero!!
So what!?
It would though unfortunately have the effect of reducing property prices.
LL have been the principal buyers of properties at the lower end of the market.
Without them the FTB is simply not capable of replacing that buying power notwithstanding the fact that few FTB have any desire to purchase the types of property in the locations that LL have bought.
But as a way to force LL to have more equity in their property purchases I have no problem at all in being required to stump up more cash to buy an investment property.
Of course it means the PRS will contract at an even faster rate though abolishing S24 could slow that reduction a fair bit.
The Govt hates leveraged LL but not leveraged homeowners even though homeowners are far more leveraged than any LL.
It could actually assist LL if S24 remains as with 50% LTV S24 becomes less onerous.
But from the LL perspective it is forcing resilience while at the same time restricting the ability to purchase multiple BTL properties with one pot of money.
Well now that pot might only buy one BTL.
Not really an issue for a LL but a real bummer for tenants who need more LL buying more rental properties.
So tenants will suffer even more.
As far as LL are concerned they should be getting the best property they can afford with their 50% and to be factoring in how they might achieve forced appreciation.
A loft extension being one of the quickest routes to enhancing value.
Perhaps many LL will not use all their cash for the deposit at 50% but buy and then spend the remaining amount on a loft conversion for example and then remortgage to pull out the increased value they will have achieved via the property improvements.
I predict we will see fewer LL buying fewer properties but those properties will be upgraded to facilitate pulling out value leaving a property potentially more capable of earning more rent and now worth considerably more than at purchase but with LTV still at 50%.
But as a policy I fully support the 50% LTV concept.
It might also get the Govt off LL backs as not so many BTL purchases would possibly occur via borrowing.
S24 might then be abolished.
We can but hope!!!