Can Buy to Let survive in the current market?

Friday, March 22nd, 2019

The latest UK Finance figures indicate there has been a year-on-year reduction across the board for buy to let lending. No matter which parameters you look at, be it the number of mortgages, the total amount of lending or even the number of new properties purchased as a buy to let property, all show a significant reduction between 2017 & 2018.

Budget changes are taking effect

Landlords have seen several significant changes over the last few years, including the introduction of the Stamp Duty surcharge, the reduction in tax relief, and much tougher stress-testing calculations now being applied by lenders when assessing what level of borrowing may be available when borrowing via a buy to let mortgage.

Savvy landlords are adapting to win 

Yet, despite all these changes, here at Caboodle Finance we have found that some savvy landlords have still managed to adapt to the new environment in order to ensure their investment properties continue to provide a good yield. Depending on the profile of their portfolio, some have chosen to focus their attention on different areas of the country whilst others have started to look more carefully at the property types that have become a little more difficult to finance via a mortgage.

That said, some landlords have taken advantage of the relaxation in rules and criteria introduced by some buy to let mortgage lenders in recent months, one of the main ones being the introduction of top-slicing, particularly where landlords are paying basic rate income tax.

Buy to Let – We can help

At Caboodle Finance, we have helped many landlords arrange buy to let mortgages and different types of finance. One recent development for landlords has been that some mortgage lenders now take the view that affordability for buy to let mortgages can include the borrower’s holistic financial position and not just the rental income for the property in question in isolation. 

Buy to Refurb to max your income?

Another approach taken by some landlords has been that rather than buying a property which is ready to let, they have opted to purchase properties requiring remedial work at perhaps a lower value and then refurbishing them to add capital value and improve rental yields by maximising rental income.

It follows that specific financial products are now available for this type of transaction. Essentially bridging finance is used in the first instance and then the borrower typically refinances the project using a standard buy to let mortgage once the works have been done and the property is in a suitable condition to let.

Specialist Buy to Let mortgage advice

In summary, it follows that whatever the project, many landlords thus prefer to enlist the expertise of a specialist buy to let mortgage broker, who will then be able to access products and facilities that may not be readily available on the high street.

Our specialist team here at Caboodle Finance of Sutton Coldfield, Birmingham always do their very best to help our clients get the buy to mortgage for their circumstances, so call us today on 0121 308 9114 or alternatively click HERE to contact us and we’ll be happy to help.