INVESTMENT IN THE PRS IS A WIN-WIN FOR TENANTS AND LANDLORDS

The renting versus house purchase debate is an age old one. Events over the past 12 months or so have helped clarify the property-related priorities of some but also served to further muddy the waters for others.

Although homeownership aspirations appear to remain strong, rising house prices and demand means that these continue to be a challenge for many. Research from Aldermore recently revealed that 38% of prospective first-time buyers said they were rejected for a mortgage once (compared to 36% in March 2020), and 43% said they were rejected for a mortgage more than once, a large spike from just 17% in March 2020.

GETTING TO KNOW YOUR CLIENT'S INVESTMENT ASPIRATIONS

Here at Dynamo we have many relationships with a variety of investors. From those who have been building their property portfolios for decades through to those who are taking their first steps onto the property ladder. Each have different short, medium and longer-term goals which will inevitably be affected by changes in circumstance, finances and future aspirations. As such, an integral role in this advice process is understanding the motivations behind these investments, the risks involved and potential exit strategies along the way.

The past year has taught us that scenarios and attitudes to money can change quickly and, from a landlord perspective, it’s important for advisers to really get to know their clients and understand where the new generation of landlords may emerge from.

THE GREEN MORTGAGE DRIVE

A growing number of landlords, homeowners and tenants are highlighting energy efficiency to help both the environment and keep running costs down. However, in order for green mortgages to really gain traction, an increasing number of lenders must get involved to create genuine competition.

Thankfully, we are seeing a raft of activity across the BTL and residential markets. In Q1, Paragon launched four green further advance products to support landlords in improving the energy performance of their properties. Foundation Home Loans also introduced a ‘Green Reward’ remortgage for landlords to reward those who have paid out to make improvements.

THE POWER OF TECHNOLOGY IN CUSTOMER ACQUISITION

I love a bit of tech. Especially in the form of new platforms and different ways to engage with people. I’m not exactly prolific across all social media platforms but I do appreciate their appeal. LinkedIn is probably the medium I have tended to use the most in recent years, although I am becoming more and more invested in what remains a relatively new concept – Clubhouse.

THE BTL SECTOR LEADS THE WAY OUT OF LOCKDOWN

I think it’s safe to say that we are all ready for lockdown restrictions to ease but only if done in a way which doesn’t hinder our freedom in the future. This is the balancing act which the government has faced over the past 12 months and I certainly don’t envy the continued challenges facing the decision makers.

Every business and individual has been forced to make some tricky decisions over this period and landlords are no different. Landlords have been impacted in many different ways and it speaks volumes of the BTL market, lenders and the advice process to see that so many have continued to remain active during this period, although there inevitably remains some degree of caution. According to the National Landlord Index by Accommodation.co.uk, over half (59.8%) of landlords are waiting for lockdown measures to ease before investing in properties.

THE INFLUENCE OF COVID-19 ON THE BUY TO LET MARKET

We all know that Covid-19 has changed business dynamics across a multitude of sectors and the mortgage market is certainly no different. With this in mind, it was interesting to see research from Quotezone – which covered a sample of landlord insurance quotes from 2019 to 2020 – highlight that redundancies and furlough may have created an emerging trend of small and first-time landlords.

Although the majority of the 19,000 landlords sampled reported owning their property for in excess of five years, a more recent spike emerged with properties owned for ‘less than one year’ seeing a 22% year-on-year rise during the pandemic. The data also showed that the average age of a landlord in the UK is 51. It added that, with only 52% of landlords using cash to purchase during 2020 – the lowest figure on record – buy-to-let is an increasingly viable option for many UK buyers.

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