A number of factors are driving activity throughout the Buy to Let sector

It’s fair to say that the money pages often tend to focus on the negative parts of the Buy-to-Let (BTL) market rather than the positive ones. I’m sure you will continue to see headlines around landlords selling property, but what you are less likely to read about is the continued resilience being shown by lenders, landlords, developers and investors - both domestic and overseas.

A number of factors are driving activity throughout the BTL sector. The obvious one being that a growing number of landlords are taking advantage of the current climates to expand their portfolios and tap into some changing tenant demands and priorities – in relation to property type, flexible home working capacity, location and outside space.

Houses appear to be more in demand than flats and it’s widely suggested that a greater number of people are looking to rent for longer. The return of the student population has also played a key role in both increased activity and demand. There was no guarantee of this happening during the early summer months and this represents a significant proportion of the BTL market, especially for professional landlords. The more specialist areas such as holiday lets and ex-pat BTL are also seeing additional options emerge and there is also growing demand among first-time buyers looking to enter the BTL market.  

This was highlighted in recent data from Legal and General which showed that criteria search combinations for first-time buyers, first-time landlords and non-owner occupiers have seen an 18% increase since the beginning of September. The data also showed that ‘holiday lets’ was the second most searched term among mortgage advisers in September, moving from the top spot in August. International travel restrictions have fuelled an increase in demand for ‘staycations’, with many choosing to holiday in the UK rather than travelling abroad.

The importance of the private rented sector continues to rise as the housing supply gap widens, the amount of affordable housing being built lessens and demand for rental property will only grow. These factors are generating more opportunities for landlords and lending appetites are escalating to provide some highly competitive funding options.

So, if Buy-to-Let is something you are considering, speak to the professionals and especially a specialist in this area, in order to make the right impact..

Coming to the end of the mortgage product term. What next?

We're seeing some issues for those coming up to the end of their product promotional rate period, especially where the lender is not offering them anything attractive to stay.  Lenders want to lend, but in some cases are not able to, or may choose not to, even to existing customers.   The simple reason being that the customers may not pass the same lenders new criteria.  Reasons can include, original borrowing on a multiple of income, age, small equity levels in property.  Lending rules have changed dramatically over the last few years and more stringent measures are in place, as well as tougher reporting to the regulator.  Lenders have to be sure the customer can afford their mortgage for a number of years ahead and stress test against possible rate rises. Seek professional advice if you are concerned or are looking for an alternative lender as some might be considered to be hiding behind the rules!

Remortgaging away from your current lender should not be looked upon negatively.  Many lenders will cover the cost of surveying your property, as well as covering the legal fees in transferring your mortgage from one lender to another.  But most of all, you should think of number one as this could save you money on your monthly budgets and, subject to terms and conditions, this can only be a good thing.

Products continue to increase and one of the fastest growth markets seems to be in the Ex-Pat sector. A British Ex-Pat in good employment abroad is favoured by a growing number of lenders who are willing to provide a mortgage to help them obtain a Buy to Let property in UK. The rules are tight but there are lenders who will advance up to 75% of the property value. Incomes usually need to be from a recognised and preferably multi-national business abroad and in a region upwards of £40000 sterling equivalent. A couple of lenders will also allow Ex-Pats to own a residential property in UK and where their family, usually off-spring, will reside pending their return to UK.  

Too much information online can be confusing!

As rates continue to reduce, competition has moved at a pace on the high street.  Most of these lenders can offer attractive low rates with free valuations and free legal costs on remortgages.  This is great if you fit the lender's mould and meet their requirements.  However, if you don’t meet their requirements or if you fail the lenders credit score, where do you go next?

The easy response is a mortgage broker who not only has access to the high street lenders but the whole of the mortgage market.  

According to recent reports in the mortgage media, circa 72% of all mortgages are now arranged through a mortgage intermediary.  A good mortgage broker will not only have access to and understand the high street offerings, they will also have access to smaller building societies and other lending institutions who can think 'outside the box', manually assess applications and lend when the high street lenders might not.  This can include lending in to retirement/over age 70, lending to the complex self employed, ExPat mortgages, buy to lets, holiday homes, multiple properties on one title and so much more.

With technology taking over the world, and so many transactions taking place over the internet, it might be easy to be attracted to products online.  There is so much information readily available and over 11,000 mortgage products to choose from, but these types of things can get lost in translation.  Therefore seek advice.  Yes, it may cost you a small fee to have someone research the market on your behalf and make recommendations, having assessed your short to long term needs and requirements.  More importantly, it could save you thousands in the long run, over choosing the wrong products yourself. In addition, any professional will probably build a long term relationship with you and contact you at the time your current rate is coming up for renewal to ensure you have the best rate available.  It's good to talk..!

Positive news for the Self Employed and also Ex-Pats!

The self employed have had a good week on the mortgage side.  Specialist lender, Precise Mortgages has changed criteria and will now allow customers to use just last years accounting figures as income for a mortgage.  Previously the lender, and most lenders, would look at two or three years figures and average over the period.  However, whether the customer has been trading one year, or twenty, the lender will now work on just the last years figures.  This is available right up to 85% of the property value and only via a small and select number of companies, including AToM. 

A number of lenders have joined the current price rate war over the last few days.   Metro Bank, Virgin Money and Leeds Building Society joined a number of other lenders who have cut rates substantially.  We even saw a six year fixed rate launched, under 3% interest rate, but sadly this was only available for three days before being withdrawn  - probably due to huge demand 

Others have also launched short term availability schemes. Accord Mortgages have launched a '10 day sale' on some of their products covering both their Residential and Buy to Let schemes.  These include lower lender fees, enhanced cash backs and low fixed rates options.  But be advised that these products will require your mortgage adviser to submit a full application before midnight on 1st October!  Terms and conditions apply, etc.

Finally, we are delighted to be one of only seven companies in the UK who can offer a new product range aimed at Ex-Patriots from Skipton International.  For UK Nationals  living abroad, looking to buy or remortgage an investment property in England and Wales, up to 75% of the property value, Skipton International will consider lending up to £1.5m with rates starting below 4% and no lender arrangement fee (for a limited time).  This really is a superb offering and if you know someone who may fit this criteria, please get them to contact us to find out more!         

Fitting criteria is the key to unlocking lenders appetite

Lenders want to lend, but in some cases are not able to, even to existing customers!  Those who already have a mortgage, but took out their original loan before April 2014 (Mortgage market Review!) may not pass the same lenders new criteria.  Reasons can include, original borrowing on a multiple of income, age, small equity levels in property. Lending rules have changed dramatically and more stringent measures are in place, as well as tougher reporting to the regulator. Lenders have to be sure the customer can afford their mortgage for a number of years ahead and stress test against possible rate rises. Seek professional advice if you are concerned or are looking for an alternative lender as some might be considered to be hiding behind the rules!

I was surprised to see that an increase in housing supply has led to two-thirds of homes selling for less than their asking price in July according to the National Association of Estate Agents. They report an 11% increase in the average number of properties for sale per branch last month from 46 to 51, the biggest increase seen in three years. However, increasing supply and declining buyer registrations (possibly as a result of the above restrictive mortgage options) resulted in around 66% of homes sold last month failing to meet their asking price. 

Products though continue to increase and one of the fastest growth markets seems to be in the Ex-Pat sector. A British Ex-Pat in good employment is favoured by a growing number of lenders who are willing to provide a mortgage to help them obtain a Buy to Let property in UK. The rules are tight but there are lenders who will advance up to 75% of the property value. Incomes usually need to be from a recognised multi-national business abroad and in a region upwards of £50000 sterling equivalent. A couple of lenders will also allow Ex-Pats to own a residential property in UK and where their family, usually off-spring, will reside pending their return to UK.   

We are finding that criteria is the key to unlocking lenders appetite and you will not find this on most, if any, of the popular web-site offerings. Talk to your local professional mortgage adviser who will know how to access this important information quickly for you.

The market is seeing a 'rate price war'!

It's always good to see a lender reduce their rates.  Over the past few days, a number of lenders have taken action and cut a number of rate offerings.  Some examples include Accord Mortgages who reduced some rates on selected fixed rates by up to 0.40%, Woolwich sliced a life time tracker rate by a huge 0.76% and other selected rates by up to 0.50%, the Halifax took 0.3% off some rates and the Coventry Building Society reduced some fixed rates by 0.20%.   All good news for the end consumer and might be a good time to look around if you are considering making changes to your mortgage.

The Ex Pat market is awash with enquiries from those living overseas looking to purchase back in the UK, in the main for a property to rent out.  Although it is a restricted market in terms of lender appetite, there are a number of specialist lenders who will consider, depending on the country of residence and nature of employment, with loans of up to 80% of the property value.   Normally a minimum valuation amount will be required, circa £150k and a minimum loan of £100k.   Most lenders will also require customers to be property owners in the UK or have had a mortgage within the last three years.

Finally, August has been a flurry of activity and caught many of us out, which is a pleasant and great surprise!  Of those approaching AToM, many are seeking straight forward simple human assistance having become confused by the huge amount of information currently available on the internet, or they've been turned away from the normal high street lender for no apparent reason, apart from maybe being told 'credit score'.  The majority are after the superb low rates currently available and also speed.  Many high street lender products are available through mortgage brokers and can often be dealt with much more quickly than with the lender directly.  But do also remember that lenders are incurring huge delays with processing and underwriting at the back end.  In addition, August’s great business volumes won’t have helped clear the back logs!