BTL - Is this a new law?

[JCKST1]

I have just been on the phone to a local agent to arrange a viewing on a cheap BTL property (50k purchase price), I have a mortgage in principle on a purchase price of approx this figure however she mentioned that a new law has just been brought in within the last few weeks which means you can not mortgage any BTL property under 50k?

They had an offer on the property and the last buyer (again a BTL investor) could not get their mortgage approved.

Not something I have heard of and I am not sure if she has got confused with the last lender not being able to offer a mortgage below 50k rather than a general ruling on all BTL properties?

Can anyone shed some light on this. Am I missing out on something or has she got the wrong end of the stick?

[BoRED S2upid]

Absolute nonsense surely. The mortgage offer would state what their minimum loan would be.

[JCKST1]

Mine does (25k) but I was a bit confused when she mentioned it as I have not heard anything like it before.

[BoRED S2upid]

I think as you said because the previous purchased couldn’t get the mortgage agreed she thinks it’s law! If you can get the loan crack on. Shame it’s not under £40k as no stamp duty to pay.

[dogz]

Its absolute nonsense!!!

Most lenders will have a minimum property value they will accept - quite a few are above the £50k - but if you hunt around you will find some who will mortgage a property worth £50k

They will also have a minimum loan amount as well but this is usually less of a problem and is usually >£25k

The Mortgage Works as an example:

Minimum loan

£25,001 (unless otherwise stated); minimum property value £50,000.

[JCKST1]

Thanks guys. I thought this was the case so will call back and arrange a viewing.

I have a mortgage offer from Molo Finance, never used them before but seem good and everything has been straight forward so far compared to other mortgages. There minimum loan amount is 25k regardless of house price. Their LTV starts at 80% for anyone interested.

Interest only mortgages but can make overpayments so will do that if I proceed.

[MondeoMan1981]

I'm wondering if any local authorities have placed a restriction on BTL purchases?

Loan wise the lender will have a minimum amount of loan for the product and they'll want a minimum loan of £25001 (outside CCA?).