New rules governing the world of buy to let lending will soon make it more difficult to add to the amount of borrowings for landlords, according to the latest research of the sector. Landlords looking to add to their portfolios will be faced with stricter guidelines from the Prudential Regulation Authority which is a branch of the Bank of England. Landlords with four or more properties will be placed under close scrutiny with regard to overall viability of the portfolio.

As of October 1^st, landlords will be placed under the microscope. Lending will become more challenging as new rules come into play. Currently, landlords seeking new funding for general finance purposes are analysed for viability of the property in which they are seeking funding for. That is soon to change as of the first day of next month.

Buy to let landlords will now be faced with a much larger workload when attempting to obtain more funding. According to research of brokers regarding this issue, it could mean even harsher results. Many landlords could find themselves without any new funding as lenders adhere to the new policies.

Some banks could abandon this type of lending entirely due to the new rules. At the very least, it might result in higher interest rates, fewer lender options, and higher fees.

Shaun Church of Private Finance, a broker, commented on the issue, saying: “Already we are seeing the mainstream lenders taking very different approaches to how they will work with these borrowers.

“Some are saying that if you have four or more properties we aren’t going to lend to you at all – probably because they don’t have the resources to deal with the extra workload. In the middle some are saying we will lend but it’s going to become much more complex.”

Church added: “Then some of the more specialist lenders are more or less enforcing the rules already so there won’t be much change.”