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More brokers searching for lenders who accept first-time landlords

In June lenders who accept first-time landlords was the most popular search on criteria sourcing system Knowledge Bank.

This follows a raft of recent product and criteria changes by lenders and suggests that potential landlords have not been put off by a loss of tax incentives and the ban on tenant fees.

Nicola Firth (pictured) chief executive of Knowledge Bank said, said: “The buy-to-let sector has taken a few punches over recent years with the removal of tax incentives, the ability to charge fees and even lenders going into administration.

“However, this is a resilient market and with competitive interest rates, and a wide product selection, potential landlords are asking brokers to find them a home for their loan requirements.

“Buy-to-let is another example of a sector where criteria changes are made on a daily basis so it’s vital for brokers to whittle down the lenders who will consider their clients in advance of any product sourcing. There’s no point finding a great product only to discover that your client is refused on criteria.”

Recent reports also show that product availability for first-time buy-to-let mortgages is the highest it has been for five years, coupled with an average fall in interest rates over the same period.

In other product areas; the monthly criteria activity tracker showed that the maximum age borrowers could be at the end of the mortgage term was the most searched-for criteria in the residential mortgage category.

Other search highlights reveal that the maximum loan-to-value continues to be the most popular search for second charge loans and the minimum age of borrowers at application the most searched for criteria within equity release.

By Michael Lloyd

Source: Mortgage Introducer

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Products for first time landlords reaches record high

The choice of products available to first time landlords has reached a record high, according to research.

The number of deals available to first time landlords has risen to 1,405 today, up from 645 five years ago. The past 12 months alone has seen 137 products enter the market.

This is in spite of the introduction of stricter lending criteria by the Prudential Regulation Authority, the phasing out of tax relief on mortgage interest payments by April 2020 and increased stamp duty on second homes.

Rachel Springall, finance expert at Moneyfacts, said: “Entering the buy-to-let market hasn’t been without its hurdles, and almost two years since the PRA introduced rules expected to tighten lending, the move doesn’t seem to have shaken up lenders attitudes to attract first-time landlords.

“In fact, the number of deals available to these individuals has now boomed to a record high.”

But Ms Springall added that while the increased choice was a positive for prospective landlords, those currently invested in property were feeling the strain.

Data from the Office of National Statistics showed London private rental prices rose by 0.9 per cent in the 12 months to May 2019, the highest annual growth seen in almost two years.

Ms Springall said: “This rise may well be linked to the staggered loss of mortgage interest tax relief, which in turn has seen landlords seeking out other ways to boost their income.”

In July 2014, an average two-year fixed rate stood at 4.01 per cent, while the average five year fixed rate was 4.68 per cent.This compared with July 2019, when the average rates are 2.97 per cent and 3.52 per cent, respectively.

Ms Springall warned, however, that borrowers must ensure they weigh-up the true cost of any deal before they commit.

“Choosing the lowest two-year rate in the market from Barclays Mortgage at 1.46 per cent would cost £20,901 in repayments after the first two years, which includes its £1,795 product fee,” she said.

“However, if they opted for a deal with a lower fee, such as the mortgage from Post Office Money priced at 1.48 per cent with a £1,495 product fee, they would have saved £255, as the repayment would be £20,646 over two years.”

By Jennifer Turton

Source: FT Adviser

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What you’re letting yourself in for as a future landlord

From getting a property ship-shape, to understanding your new legal responsibilities, becoming a landlord for the first time can feel like a daunting prospect.

Whether you’re an “accidental” landlord after deciding to rent your house in a sluggish selling market, or you’re planning to start a property empire, getting to grips with the basics of letting out a home could save you some grief further down the line.

If you are looking to invest, you’ll want to choose your property wisely. Rising mortgage rates, as well as recent tax changes for landlords, may be leaving some seeing their profit margins squeezed. So choosing a property in the right location is even more vital for maximising returns.

Research from TotallyMoney suggests university cities could be worth considering, with parts of Liverpool, Plymouth, Preston, Nottingham, Bradford, Manchester, Sheffield, Leeds, Cardiff, Glasgow and Aberdeen identified as buy-to-let property hotspots.

Here are letting agents’ body Arla Propertymark’s top tips for budding landlords…

Do your homework

Get to know your market. Research similar properties in the local area and find out how much they are being let for per month. If your rent is set too high or too low prospective tenants will steer clear.

It’s also worth considering what type of renter the property will appeal to, such as young professionals, families or students.

Once you’ve done your homework, set a competitive price and aim to keep it filled at all times to minimise rental voids.

Know your responsibilities

With your new status comes great responsibility. In the first instance, check that your mortgage allows you to let out your property, as some agreements include caveats to prevent homes from being rented. If you are unsure, speak to your mortgage lender and they will be able to advise you accordingly.

Ensure you’re insured

Your existing buildings and contents insurer must be made aware of your intention to let your property as it’s likely your policy will need to be amended. Specific landlord insurance policies can protect the building, your tenants and your investment as a whole – some policies will also pay out if your tenant misses their rent payments.

Vet prospective tenants

You may wish to meet potential tenants before agreeing to let them your property, or you may prefer to leave it to your letting agent, if you use one. An agent can perform reference and credit checks on potential tenants to ensure everything is reliable.

Know the law

When it comes to being a landlord, there are more regulations to comply with than you can shake a stick at. A written tenancy agreement will help both you and your tenant understand rights and responsibilities and make sure you understand your responsibilities to make sure the property is safe.

Choose the right agent

If you do decide to use a letting agent, a good one can take away the stress of finding suitable tenants and also ensure your property complies with any regulatory changes. You will need to factor this into your budget though.

Source: Scotsman

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First time landlords’ appetite for property proves buy-to-let remains popular

Seven percent of a mortgage lender’s new business in 2017 came from first time landlords – despite regulatory and tax changes that may have acted as a deterrent.

The stream of new landlords peaked in November when 11 per cent of the lender’s applications came from first timers, says buy-to-let lender Accord Mortgages.

The figures are proof that buy-to-let remains a popular option for people who are looking to safeguard their financial future, despite recent moves from government to suppress the market.

And 57 per cent of Accord’s buy-to-let applications received last year were from landlords affected by new changes, with one third (32 per cent) of that cohort, coming from those with four or more properties.

Another 18 per cent were from landlords classed as consumers – that is, single property landlords where they or their relatives have previously lived.

Chris Maggs, commercial manager at Accord, said: “2017 was a year of remortgaging for landlords who reaped the benefit of some exceptional mortgage rates, and 2018 is likely to be no different.

“Last year Accord, like many other lenders, adapted its mortgage offerings to meet the changing needs of the market.

“Equally, as new regulation was implemented landlords have begun to adapt to ensure their business withstands the changes.

“This doesn’t negate the fact that things are still tough for landlords, and hopefully 2018 will give them some breathing space to take stock of the changes.

“However, landlords have demonstrated resilience when presented with challenges in the past, and I’m sure that will continue into 2018.”

Source: Simple Landlords Insurance