Specialist buy-to-let business, Platinum Property Partners (PPP), says that the proposed income restrictions announced by the Bank of England to curb risky mortgage lending is a positive move.

The new rules mean that borrowers will be denied loans on residential mortgages unless they can pass a ‘stress test’ proving they could still cover repayments if interest rates rose by 3 per cent.

Steve Bolton, Founder and Chairman of PPP, says that not only will the planned measures help to curtail the house price boom, but that they will prevent first time buyers getting into unnecessary debt if they struggle to meet repayments.

He commented: “PPP fully supports the Bank of England’s mortgage lending cap and have already seen evidence that it’s cooling the market. In the last three months, our team of property experts have seen a much higher volume of ‘sale agreed’ homes coming back onto the market and less sealed bid and open house viewings.

“It also means that it won’t be as easy for home-buyers to take on too much debt. While many first time buyers will continue to benefit from parental support or schemes such as Help to Buy, shared equity and deposit incentives, a considerable number may now chose to stay in rental properties.

“Fortunately, there is an increasing volume of high-quality, low-cost shared housing available for key workers and young professionals. This not only enables tenants to save a greater part of their income towards a deposit, but introduces them to the idea of renting out a room, which could contribute significantly to costly mortgage payments if and when they buy. It also allows them to live flexibly in the medium term to help them get to know an area and see if this is where they want to lay their roots.

“The new mortgage rules may, at first glance, seem to hinder first time buyers in the short term. But in fact, they will go a long way to protecting them against borrowing above their means and will increase their education about money management in general.”

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