Last month we sat on the cusp of a Budget and landlords everywhere were hoping for some respite after the raft of recent Government pressure in regard to taxes, policy and regulation. Little did I realise then just how fast our world would change over such a short space of time. Whilst the Government has maintained a focal point on the mortgage market, this is only one of many areas of concern for our nation. To re-cap, Chancellor Rishi Sunak announced that mortgage lenders will offer “at least” a three-month break from mortgage repayments for homeowners experiencing financial difficulties as a result of coronavirus. The Government then decided that residential buy-to-let (BTL) landlords are entitled to the same three-month mortgage repayment holiday as residential homeowners if they have tenants struggling to pay rent.

This announcement was made in an effort to ease the financial pressure on landlords and tenants during the Covid-19 outbreak. To further protect tenants, the Government has also stated that landlords will not be able to start proceedings to evict tenants for at least three-months. Landlords and tenants are also being urged to work together to establish an affordable repayment plan, which considers the tenants’ individual circumstances. These are all sensible moves and it’s great to see the Government take quick and decisive action.

In terms of BTL finance, lenders are also having to deal with the impact of Covid-19, social distancing, working from home restrictions and they are being forced to restructure their product offerings/servicing requirements accordingly. Inevitably, in a similar manner to the residential mortgage market, this is impacting their capacity to write new business as additional resources are being allocated to servicing existing pipeline deals and the raft of mortgage holiday requests. There is also the issue of valuations to contend with. The aforementioned government restrictions on social distancing mean that lenders have been forced to temporarily suspend all valuation activity which involves a physical inspection of property.

Technology will help solve some of these issues. There will be a greater reliance on the use of AVMs by lenders for lower LTV applications. And with many product transfers able to be processed without the need for physical valuations, BTL business can still be completed – providing lenders have the systems, processes and staff in place to be able to complete this type of business. However, many lenders have had little option but to reduce their product exposure, especially at the higher LTV levels and many specialist lenders have temporarily closed the door to new lending.

Having said this, I want to reiterate that despite some headlines you may have seen indicating that the mortgage market is on total lockdown, this is not entirely true. Yes, it remains a tough time for lenders, brokers, landlords, tenants and homebuyers but options and advice are still available for a host of borrowers. The BTL wheels keep turning, albeit slower than we are used to, and let me reassure you that this is a market which will return in full force. The only thing we can’t be sure of at the moment is when.