It's important that we don’t get too carried away, but it’s highly encouraging to see lenders steadily returning to the market and new products emerging. Of course, we’re still far away from pre-lockdown market conditions and it will be some time until those heights are reached once again. However, business is still being written and the value of expert advice in getting these deals over the line has never been higher.
All lenders, large and small, have been asked to make difficult decisions across many aspects of their business. They have faced a huge amount of pressure from the Government in terms of having mortgage payment holidays forced upon them at relatively short notice. In general, lenders have reacted quickly, effectively, and decisively but how are landlords responding to this issue?
It depends on the individual in question, and there are many factors to consider before deciding upon this option.
• Taking a mortgage payment holiday should not impact your credit history and it can help with cashflow if tenants are struggling to pay their rent
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.
I recently spoke on the Accord Mortgages Growth Series podcast and suggested that lenders should embrace technology to increase speed, efficiency and automation within the private rented sector.
The kind of technology we’re talking about requires a more joined-up approach, but as an industry we still appear to be lacking this to a certain extent. Now I’m certainly not backing away from this statement in any way, shape or form as technology is – and will continue to be – the major driving force of the modern mortgage market, although I’d also like to take this opportunity to play devil’s advocate and take a wider look at the relationship between lenders, technology and the intermediary market.
Landlords are constantly adapting to conditions in what remains an ever-evolving buy-to-let marketplace, but some old concepts still ring true – the importance attached to location and rental yields.
When it comes to regional variations, it currently appears that landlords based in the Midlands are most likely to increase their portfolio size. This is according to a study conducted by BVA BDRC, which outlined that 24% of landlords in the East Midlands and 22% in the West Midlands plan to purchase more properties in the next 12 months. Meanwhile, 8% of landlords in South West and 9% in Central London intend to purchase more properties within the same timeframe. Overall, the data shows that 14% of landlords intend to purchase property, with the average preparing to buy three properties.
As I was just about to start writing this piece an email flashed up in the bottom righthand corner of my computer screen. It was from my bank and had the subject line ‘How are you preparing for the future, Mr Tan?’ This was followed by the line ‘Take action today for a better tomorrow’.
This was both a very pertinent question and a particularly strong call to action, especially after I had just read some snippets of an OMS report: “Living longer: changes in housing tenure over time”. The report examines changes in housing tenure between 1993 and 2017 and what those changes might mean for older people in the future.
The main points from this being:
• Almost three-quarters of people aged 65 years and over in England own their home outright.