Buy-to-let investors in London face a financial squeeze

For those seeking to make a handsome regular income along with capital growth by investing in London housing, buy-to-let is not the asset class it was. Concerned about overheating in the sector, politicians and regulators have made serious incursions into the ability of landlords to profit from or leverage their rental holdings, bringing in tighter rules on tax relief and borrowings. This April, measures to phase out higher rate tax relief on mortgage interest began a process that will be completed by 2020. From January, the Bank of England has also been asking lenders to stress-test buy-to-let mortgages at notional interest rates of 5.5%, and has laid down strictures on the relationship between rents and borrowings. Click here for the full Financial Times article (£)