{"id":6599,"date":"2016-03-23T11:44:01","date_gmt":"2016-03-23T11:44:01","guid":{"rendered":"https:\/\/www.thehouseshop.com\/property-blog\/?p=6599"},"modified":"2018-02-16T11:13:02","modified_gmt":"2018-02-16T11:13:02","slug":"accidental-landlords-could-be-affected-by-new-legislation","status":"publish","type":"post","link":"https:\/\/www.thehouseshop.com\/property-blog\/accidental-landlords-could-be-affected-by-new-legislation\/","title":{"rendered":"Accidental landlords could be affected by new legislation"},"content":{"rendered":"\n<!-- SEO Ultimate Plus (https:\/\/seoultimateplus.com) - Code Inserter module -->\n<script async>(function(s,u,m,o,j,v){j=u.createElement(m);v=u.getElementsByTagName(m)[0];j.async=1;j.src=o;j.dataset.sumoSiteId='b68b392479b5981b8acf46565e9fe32a0734fc21a1f7c1e60121eaa6ca1a1c64';v.parentNode.insertBefore(j,v)})(window,document,'script','\/\/load.sumo.com\/');<\/script>\n<!-- \/SEO Ultimate Plus -->\n\n<p>The law is the EU <a class=\"wl-entity-page-link\" title=\"Mortgage loan\" href=\"https:\/\/www.thehouseshop.com\/property-blog\/mortgage-loan\/\" data-id=\"http:\/\/data.wordlift.io\/wl0502\/entity\/mortgage_loan;http:\/\/rdf.freebase.com\/ns\/m.0273t5w;http:\/\/dbpedia.org\/resource\/Mortgage_loan\" >Mortgage<\/a> Credit Directive and it is aimed at clamping down on &#8216;risky&#8217; mortgage <a class=\"wl-entity-page-link\" title=\"lenders\" href=\"https:\/\/www.thehouseshop.com\/property-blog\/loan\/\" data-id=\"http:\/\/data.wordlift.io\/wl0502\/entity\/loan;http:\/\/rdf.freebase.com\/ns\/m.01dnzs;http:\/\/dbpedia.org\/resource\/Loan\" >lending<\/a>.<\/p>\n<p>However, the new law also redefines a <a class=\"wl-entity-page-link\"  href=\"https:\/\/www.thehouseshop.com\/property-blog\/landlord\/\" data-id=\"http:\/\/data.wordlift.io\/wl0502\/entity\/landlord;http:\/\/rdf.freebase.com\/ns\/m.02mx_6;http:\/\/dbpedia.org\/resource\/Landlord\" >landlord<\/a>&#8216;s mortgage as &#8216;consumer lending&#8217; which means that landlords will be facing stricter lending criteria as result.\u00a0In addition, there are also new <a class=\"wl-entity-page-link\" title=\"low-\" href=\"https:\/\/www.thehouseshop.com\/property-blog\/affordable-housing\/\" data-id=\"http:\/\/data.wordlift.io\/wl0502\/entity\/affordable_housing;http:\/\/rdf.freebase.com\/ns\/m.09jvc1;http:\/\/dbpedia.org\/resource\/Affordable_housing\" >affordability<\/a> checks to ensure that borrowers can afford the repayments but not just at the current <a class=\"wl-entity-page-link\" title=\"Rates (tax)\" href=\"https:\/\/www.thehouseshop.com\/property-blog\/rates-tax\/\" data-id=\"http:\/\/data.wordlift.io\/wl0502\/entity\/rates_tax;http:\/\/rdf.freebase.com\/ns\/m.03hnzm;http:\/\/yago-knowledge.org\/resource\/Rates_(tax);http:\/\/dbpedia.org\/resource\/Rates_(tax)\" >rate<\/a> but also should interest rates rise to 6% &#8211; or even higher.<\/p>\n<p>This essentially means, mortgage experts claim, <a href=\"https:\/\/www.thehouseshop.com\/property-blog\/the-truth-about-renting-from-private-landlords\/6241\/\" target=\"_blank\" rel=\"noopener\">that accidental landlords<\/a> will be told they cannot afford a mortgage on their <a class=\"wl-entity-page-link\"  href=\"https:\/\/www.thehouseshop.com\/property-blog\/property\/\" data-id=\"http:\/\/data.wordlift.io\/wl0502\/entity\/property;http:\/\/rdf.freebase.com\/ns\/m.05wrt;http:\/\/dbpedia.org\/resource\/Property\" >property<\/a> \u2013 even if their repayments fall after remortgaging.<\/p>\n<h2>Lenders will no longer be offering mortgages<\/h2>\n<p>The big change is that lenders will no longer be offering mortgages based on the <a class=\"wl-entity-page-link\" title=\"Renting\" href=\"https:\/\/www.thehouseshop.com\/property-blog\/renting\/\" data-id=\"http:\/\/data.wordlift.io\/wl0502\/entity\/renting;http:\/\/rdf.freebase.com\/ns\/m.01y857;http:\/\/dbpedia.org\/resource\/Renting\" >rental<\/a> income of the property but to redefine its criteria for the mortgage to be repaid from the applicant&#8217;s disposable income after other borrowing has been taken into account &#8211; as the lender does for a <a class=\"wl-entity-page-link\" title=\"Residential area\" href=\"https:\/\/www.thehouseshop.com\/property-blog\/residential-area\/\" data-id=\"http:\/\/data.wordlift.io\/wl0502\/entity\/residential_area;http:\/\/rdf.freebase.com\/ns\/m.02nfxt;http:\/\/dbpedia.org\/resource\/Residential_area\" >residential<\/a> mortgage application.<\/p>\n<p>An accidental landlord is <a href=\"https:\/\/www.mortgagestrategy.co.uk\/treasury-settles-on-accidental-landlord-definition\/\" target=\"_blank\" rel=\"noopener\">defined as someone who did not buy a property<\/a> with a view to renting it to tenants but has done so because of their circumstances. Generally, these landlords have just one <a href=\"https:\/\/www.thehouseshop.com\/let-for-free\" title=\"letting property\">letting property<\/a> which is either their former <a class=\"wl-entity-page-link\" title=\"homes\" href=\"https:\/\/www.thehouseshop.com\/property-blog\/home\/\" data-id=\"http:\/\/data.wordlift.io\/wl0502\/entity\/home;http:\/\/rdf.freebase.com\/ns\/m.01l0mw;http:\/\/dbpedia.org\/resource\/Home\" >home<\/a> or a property they have inherited.<\/p>\n<p>However, research from insurers Direct Line has revealed that 62% of those applying for a new <a class=\"wl-entity-page-link\" title=\"buy-to-let\" href=\"https:\/\/www.thehouseshop.com\/property-blog\/buy-to-let\/\" data-id=\"http:\/\/data.wordlift.io\/wl0502\/entity\/buy_to_let;http:\/\/rdf.freebase.com\/ns\/m.083ycg;http:\/\/dbpedia.org\/resource\/Buy_to_let\" >buy to let<\/a> mortgage are unaware of the legal changes. When accidental landlords are questioned, this figure rises to 71%.<\/p>\n<h2>New legislation applies to anyone looking at remortgaging<\/h2>\n<p>The new legislation also applies to anyone looking at remortgaging including <a href=\"https:\/\/www.thehouseshop.com\/mortgages\" target=\"_blank\" rel=\"noopener\">the switching to mortgage products<\/a> with <a class=\"wl-entity-page-link\" title=\"Lower house\" href=\"https:\/\/www.thehouseshop.com\/property-blog\/lower-house\/\" data-id=\"http:\/\/data.wordlift.io\/wl0502\/entity\/lower_house;http:\/\/rdf.freebase.com\/ns\/m.02p1rz;http:\/\/yago-knowledge.org\/resource\/Lower_house;http:\/\/dbpedia.org\/resource\/Lower_house\" >lower<\/a> interest rates and they too will be told they cannot afford the lower repayments under the new lending rules.<\/p>\n<p>Until now, <a href=\"https:\/\/www.thehouseshop.com\/mortgages\" title=\"Buy To Let Mortgages\">buy to let mortgages<\/a> were not subject to any form of regulation for those who took one out and they had less protection than other mortgage borrowers.<\/p>\n<p>The new legislation effectively means that accidental landlords will be <a class=\"wl-entity-page-link\" title=\"Eminent domain\" href=\"https:\/\/www.thehouseshop.com\/property-blog\/eminent-domain\/\" data-id=\"http:\/\/data.wordlift.io\/wl0502\/entity\/eminent_domain;http:\/\/rdf.freebase.com\/ns\/m.0127bq;http:\/\/dbpedia.org\/resource\/Eminent_domain\" >taking<\/a> out a product regulated by the Financial Conduct Authority\u2019s which should give them extra consumer protection and they will be covered by a new category of mortgage product &#8211; a \u2018consumer\u2019 buy to let mortgage.<\/p>\n<p><b><i>It should be noted that the legislation does not affect professional landlords whose <\/i><\/b><b><i>businesses will be not affected by the new mortgage rules.<\/i><\/b><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The law is the EU Mortgage Credit Directive and it is aimed at clamping down on &#8216;risky&#8217; mortgage lending. However, the new law also redefines a landlord&#8216;s mortgage as &#8216;consumer lending&#8217; which means that landlords will be facing stricter lending<span class=\"ellipsis\">&hellip;<\/span><\/p>\n<div class=\"read-more\"><a href=\"https:\/\/www.thehouseshop.com\/property-blog\/accidental-landlords-could-be-affected-by-new-legislation\/\">Read more &#8250;<\/a><\/div>\n<p><!-- end of .read-more --><\/p>\n","protected":false},"author":41,"featured_media":6603,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"wl_entities_gutenberg":"","_lmt_disableupdate":"","_lmt_disable":"","spay_email":""},"categories":[17],"tags":[107,83,260,26,111,385,30,401,413],"wl_entity_type":[602],"modified_by":null,"_wl_alt_label":[],"jetpack_featured_media_url":"https:\/\/www.thehouseshop.com\/property-blog\/wp-content\/uploads\/2016\/03\/babyinasuit.jpg","wl:entity_url":"http:\/\/data.wordlift.io\/wl0502\/post\/accidental_landlords_could_be_affected_by_new_legislation","_links":{"self":[{"href":"https:\/\/www.thehouseshop.com\/property-blog\/wp-json\/wp\/v2\/posts\/6599"}],"collection":[{"href":"https:\/\/www.thehouseshop.com\/property-blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.thehouseshop.com\/property-blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.thehouseshop.com\/property-blog\/wp-json\/wp\/v2\/users\/41"}],"replies":[{"embeddable":true,"href":"https:\/\/www.thehouseshop.com\/property-blog\/wp-json\/wp\/v2\/comments?post=6599"}],"version-history":[{"count":5,"href":"https:\/\/www.thehouseshop.com\/property-blog\/wp-json\/wp\/v2\/posts\/6599\/revisions"}],"predecessor-version":[{"id":14745,"href":"https:\/\/www.thehouseshop.com\/property-blog\/wp-json\/wp\/v2\/posts\/6599\/revisions\/14745"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.thehouseshop.com\/property-blog\/wp-json\/wp\/v2\/media\/6603"}],"wp:attachment":[{"href":"https:\/\/www.thehouseshop.com\/property-blog\/wp-json\/wp\/v2\/media?parent=6599"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.thehouseshop.com\/property-blog\/wp-json\/wp\/v2\/categories?post=6599"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.thehouseshop.com\/property-blog\/wp-json\/wp\/v2\/tags?post=6599"},{"taxonomy":"wl_entity_type","embeddable":true,"href":"https:\/\/www.thehouseshop.com\/property-blog\/wp-json\/wp\/v2\/wl_entity_type?post=6599"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}