"Specialist lenders really are leading the way when it comes to maintaining forward momentum throughout the buy-to-let sector."
A recent return from Vida to the residential and buy-to-let market is a positive one, especially with some products available up to 85% LTV. We’ve also seen Foundation Home Loans re-enter the 80% LTV band and Accord Buy To Let resume accepting applications from first-time landlords up to a maximum loan-to-value of 75%. And there is a common theme here - specialist lenders.
Specialist lenders really are leading the way when it comes to maintaining forward momentum throughout the buy-to-let sector. The reasons behind this increased appetite are varied, but much of this stems from a robust UK housing market and strong levels of demand. Factors which have been further accelerated by the raising of the stamp duty threshold to generate even more property-related opportunities.
Indeed, research from FJP investment outlined that almost a quarter of investors are planning on buying one or more properties to take advantage of the stamp duty holiday. The independent survey took place amongst 900 UK-based investors, all of whom have investments and savings in excess of £10,000, excluding the value of their residential property and workplace pensions. It found that 24% are planning on buying one or more properties to take advantage of the stamp duty holiday, the figure rose to 43% for those aged between 18 and 34.
When it came to real estate, investors felt that more needs to be done to support homebuyers and property investors beyond the current measures that are in place. 42% said the Government needs to offer additional support to homebuyers and property investors beyond the stamp duty holiday. Over half (54%) of investors said they are in favour of extending the mortgage payment holiday relief scheme beyond 31st October 2020.
It will be interesting to chart the government’s next moves, especially when it comes to buy-to-let as landlords have borne the brunt of many policy decisions over recent years. Thankfully, for now at least, there appear to be no major obstacles on the horizon which further impact portfolio demands, but this is an area which all links in the buy-to-let chain should be closely monitoring. We all know how quickly our world can change.
Back to the present and it’s clear that confidence is growing throughout the buy-to-let sector as competition continues to intensify. Many specialist lenders are repositioning their offerings in the line with a new economic environment, restricted funding lines and with modified processing to maintain service standards/capacity. This is adding up to a competitive but highly complex marketplace. In terms of criteria and policy, we’re seeing constant shifts to combat changes within the wider economic landscape. When it comes to accessing products in the buy-to-let sectors, there’s been a rise in complex calculations regarding landlord’s portfolios – with some lenders maxing out at 75% LTV across the board.
The re-emergence of various specialist lending propositions has proved a great catalyst for the buy-to-let market and have also highlighted the value of the advice process for landlords. A further consideration for intermediaries is the importance of additional support on offer from specialist distributors and packagers to help them and their clients cut through this additional complexity and keep track of ever-changing criteria demands.
It remains an interesting time, and the buy-to-let sector continues to lead the way in terms of demand and opportunities being created – if clients know where to look, and how to correctly explore them.
