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.

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Your initial consultation is free and you are under no obligation to proceed with a mortgage we recommend. There will be a fee for mortgage advice. The exact fee will depend on your circumstances and may be reduced depending on the loan amount and any commission we receive from the lender. It is estimated that the fee will be £595, but it may range from £495 to 1% of the amount you borrow. The fee is only payable on completion and can normally be added to the mortgage. This will be discussed and agreed with you before you make an application. Please ask for a personalised illustration.

Secured loan rates from 3.95% APRC, although we have plans available up to 29.9% APRC which allow us to assist customers with the most severe credit problems. The overall cost for comparison is 7.65% APRC. There will be a fee for secured loan advice and the exact fee will depend on your circumstances. The fee is only payable on completion and can normally be added to the loan. A lender fee may also apply. The actual APRC available will depend on your circumstances. All loans are subject to status. Please ask for a personalised illustration.

The guidance and/or advice contained in this website is subject to UK regulatory regime and is therefore restricted to consumers based in the UK.

Caboodle Financial Services Ltd, registered in England and Wales at Mere Green House, 46-48 Mere Green Road, Sutton Coldfield, West Midlands B75 5BT (number 08044670).
Caboodle Financial Services Ltd is an appointed representative of PRIMIS Mortgage Network (PRIMIS), a trading name of Advance Mortgage Funding Ltd which is authorised and regulated by the Financial Conduct Authority. PRIMIS is only responsible for the service and quality of advice provided to you in relation to mortgages, protection insurance and general insurance products. Any other product or service offered by Caboodle Financial Services Ltd may not be the responsibility of PRIMIS and may also not be subject to regulation by the Financial Conduct Authority. The Financial Conduct Authority does not regulate some forms of Buy to Let.

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