Property conveyancing: Draft EU legislation may penalise buy-to-let landlords

Buy-to-let landlords may be penalised by new draft European Union (EU) legislation for residential mortgages.

While the new rules are designed to prevent irresponsible lending by certain mortgage companies, the uniform laws could severely damage the buy-to-let market.

Speaking about the proposals, Conservative MEP Vicky Ford, stated: "[The EU] draft rules are deeply prescriptive, fail to [recognise] differences in different countries and could result in huge extra costs for house owners."

According to Ms Ford, "unless we are exempted from EU rules, lenders will not be able to count rental income when making mortgage offers". This will prevent those in retirement or using private savings from entering the buy-to-let market.

With the cost of buying a property still being out of reach for many prospective property owners, the buy-to-let sector has become increasingly lucrative and vital in the UK as more and more people are forced to rent.

Without a vibrant rental market, the UK may face a severe housing shortage.

Published by Phil Hammond