What the papers said about the Buy-to-Let market and ‘BOMAD’

There is a new lender in town, claimed this weekend’s financial press, and it goes by the name of BOMAD. In actual fact it is the Bank of Mum and Dad, and is by no means new, but it does now feature in the lender top ten. It is predicted to fund a quarter of all UK property purchases this year, lending more than £6.5 billion. Not all families are able to hand over hard cash of course, and the Times, Telegraph and Sunday Express looked at the alternatives available. Some Family Assistance mortgages, for example, allow parents to keep a percentage of the purchase price in a savings account to act as the deposit. This allows them to keep their savings in their name. Other options include buying on a joint ownership but single title basis for the child, which will avoid the stamp duty surcharge and Capital Gains Tax liability. The Buy-to-Let market also featured heavily this weekend, with the Times and Sunday Times looking at the increased number of mortgage deals available to landlords buying property through a Limited Company. This is a sector favoured more by smaller lenders than the larger banks, and interest rates are typically higher than standard BTL mortgages. Limited companies will not lose mortgage interest tax relief under the new rules being phased in. Experts warned however that, come Autumn, lenders will be required to apply tougher affordability criteria to investors who own more than 4 properties.