There are a large number of landlords who may struggle to remortgage buy to let properties when their two year fixed deal comes to an end this Spring – a specialist buy to let lender may offer the solution.
In March 2016, many property investors raced to snap up properties before the 3% stamp duty charge on second homes came into force. These deals have now come to an end, meaning landlords will need to remortgage to avoid slipping into the lender’s standard variable rate products, which are priced significantly higher.
Last Autumn, buy to let lenders were forced to apply tighter lending restrictions which has in some cases reduced how much landlords can borrow and prevented them from qualifying for the cheapest deals. The additional compliance requirements which lenders now assess include; checking income and expenditure on bank statements, assessing cash flow across the entire portfolio and documenting landlord’s future ambitions through a business plan.
Landlords with four or more properties have been particularly hit hard as some high street lenders have reacted cautiously to the additional compliance requirements, restricting their lending to only customers with one to three properties.
Specialist buy to let lenders who focus their products on customers who high street lenders will not cater for have remained extremely supportive of landlords with four or more properties. These lenders have responded to the changes positively by releasing innovative products which help landlords to maximise the amount they can borrow.
This has been done through the introduction of more five year fixed rate products as these are not always subject to the same level of affordability checks. Plus, some lenders now have products offering cashback to offset some of the stamp duty costs.
Specialist buy to let lenders also apply a much more flexible underwriting approach based on common sense decisions rather than a computer scoring system. The lenders usually have teams who are extremely experienced in this field, allowing them to understand the deal and the landlord’s portfolio structure, to enable them to offer competitively priced terms to suit each situation.
Our whole of market team of Mortgage and Protection Brokers can help landlords with small or large portfolios to find the best deal.
For a free no-obligation review of your current buy to let products or for advice on the best way to raise funds to expand your portfolio, call us on 01702 538 800 or arrange a call back.