Posts with tag: Mortgages for Business

UK landlords show increased interest in green buy-to-let mortgages

Published On: April 20, 2021 at 8:00 am


Categories: Finance News

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Three in every five landlords are now interested in green buy-to-let mortgages, according to research by Mortgages for Business.

62% of landlords responded to the buy-to-let (BTL) broker’s survey saying they are interested in mortgages that reward borrowers with discounted rates for making their properties more energy-efficient and shrinking their carbon footprint.

Jeni Browne, director of Mortgages for Business, comments: “Much of the UK’s housing stock is very energy inefficient, making our homes a major source of greenhouse gas emissions.  Improving the energy efficiency of the UK’s stock of housing is a priority in the fight against climate change.  

“A green mortgage means that, once they can confirm they have a revised energy rating for their property, the right lender will recalculate their mortgage rate at a discount.  There are various mortgage products out there but the best are applied on completion of an energy efficiency project and applied for the lifetime of a mortgage.  

“Given housing accounts for such a significant chunk of the UK’s carbon emissions, it’s great that landlords are so interested in making greener choices – spurred on, no doubt, by the fact landlords are rushing to upgrade their properties to meet new EPC rating rules by 2028.  Whatever the reasons, landlords now appear interested in joining the battle to combat climate change. That hasn’t always been the case.”

The results of this survey, which involved 300 landlords across the UK, showed none of the respondents who had acquired their first BTL property before the year 2000 had been interested in green mortgages at the time of purchase. Only 10% of the landlords who had acquired their first BTL property in the 2000s said they had been interested in green mortgages when they made the purchase.

Jeni Browne comments: “We started trading in 1990 and the findings of our poll match our experience of the market over the last 30 years. Landlords’ attitudes have changed dramatically, particularly in the last decade. Landlords should be interested in these products though – quite apart from the ethical considerations, green mortgages reward landlords with a lower rate when they shrink their carbon footprint.”

The research also found that less younger landlords were interested in green mortgages than older landlords. Only 50% of landlords under the age of 45 polled by Mortgages for Business said they were interested in green mortgages, compared to 66% of those over 45.

Jeni Browne comments: “Hopefully, our research will help drum up more lender supply. The UK’s largest lenders have launched a wave of climate-change products amid criticism over their slow response to global warming.  For instance, one of the big lenders did launch a Green Mortgage last year and we’ve seen others follow suit but have only offered borrowers preferential rates when they purchase an energy efficient property – rather than rewarding those improving the ecological footprint of the UK’s housing stock. It’s not enough and that’s why they have failed to impress campaigners.

“Given Britain has just enjoyed the greenest Easter on record, with almost 80% of the energy used at lunchtime on Easter Sunday coming from zero-carbon sources such as solar and wind, the industry is in danger of falling behind the times unless we do our bit.”

How landlords can avoid getting caught up in Stamp Duty ‘chaos’

Published On: March 3, 2021 at 9:54 am


Categories: Finance News,Property News

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Mortgages for Business has provided tips for landlords looking to avoid the chaos caused by residential buyers trying to beat the Stamp Duty holiday deadline.

The specialist buy-to-let broker is offering landlords four key pieces of advice: Be prepared to rethink location, choose a broker offering a portal, carefully consider the type of property you are investing in, and Pick the right lender.

Mortgages for Business says if landlords consider all four of these factors, they could get their transactions completed in spite of the chaos affecting the market.

1. Look at your location in a new light

Mortgages for Business says even lenders still capable of doing deals in sensible timeframes are struggling to get mortgages approved where local authorities are dragging their feet.  The slowest local authorities are now taking more than 100 days to undertake property searches, a key element of the conveyancing process, as the surge in transactions coincides with pandemic-related staff shortages. It highlighted Hackney Borough Council (180 working days), Bedfordshire Council (65 working days), Caerphilly County Borough Council (60), Cambridge City Council (50), and North Warwickshire (50) as the worst performers.

Jeni Browne, director of Mortgages for Business said, “Landlords who just want to get a purchase done are sick of the Stamp Duty rush.  If you have the option, you should consider the effect that the local authority you are dealing with could have on your purchase.  One search we ordered recently took 145 days to complete.  If you are considering purchasing a property in Hackney before the turn of the next century, you may want to rethink”.

2. The importance of portals

Data from Mortgages for Business’s landlord portal shows that it takes less time to process applications if they are done via portals, with average deadlines shortening by 20 days, from 73 working days to 53 – cutting down the time it takes to process a transaction by 27%.

Jeni Browne said, “Portals offer clients a space with clear to-do lists, including which documents are required to move the application forward, and the ability to upload all documents quickly and securely, there and then.  While this research is based on our data, I’m sure we’re not the only broker with a good portal. My advice to landlords looking to take control of their own destiny is to use a specialist buy-to-let broker with portal technology.  It is a very simple way to shave a couple of weeks off a buy-to-let property transaction.”

3. Choose the right property

Mortgages for Business says not all property purchases are created equal and that transactions can take 11% longer if the property in question is a flat, rather than a semi-detached house.

Jeni Browne commented: “Even if you’re not trying to hit the Stamp Duty deadline, you may well find that your deal gets caught in the crossfire.  Picking a semi-detached house, rather than a flat will help smooth the way.”

4. Choose the right lender

The specialist buy-to-let broker also took the opportunity to warn landlords that more than half the buy-to-let lenders who are actively lending at the moment are capable of doing a deal within the usual industry average. Those purchasing vanilla properties can expect an estimated normal eight-week completion time.

Jeni Browne concludes: “Most lenders are still quoting application-to-offer times of about three weeks which doesn’t sound too long. But the reality is that these timeframes are not being met. To get deals down relatively quickly, you need to avoid lenders that are dragging their feet. While we’re not lenders in our own right, we can ensure landlords are using the right lender. Go to the wrong one and you could find yourself dealing with a lender that is taking weeks to respond to enquiries. 

Chancellor’s stamp duty holiday provides investment opportunity for landlords

Published On: July 20, 2020 at 8:19 am


Categories: Landlord News

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With landlords in a position to benefit from the tax savings announced in the Chancellor’s summer statement, Mortgages for Business says that property investors should not squander Rishi Sunak’s surprise boost.

Steve Olejnik, managing director of Mortgages for Business said: “Clearly, landlords need to take advantage of the stamp duty holiday before the window closes in March next year.  

“Property investors are in a better position to qualify for a mortgage now that reduced stamp tax allows them to wield a larger deposit.  

“Furthermore, if the measures Rishi Sunak has put in place underpin property values, the cut will help those looking to remortgage as well.  

“Less obviously, landlords may not appreciate they need to act while they are well-placed to move in a way that owner-occupiers are not. We know property investors have been remortgaging with a view to picking up some bargains. Owner-occupiers have not been doing the same.  

“Landlords have been preparing since the start of the lockdown, remortgaging to enlarge potential war chests with an eye on bagging bargains in the future. First Time Buyers don’t have that flexibility and owner-occupiers haven’t been remortgaging in the same way.

“That means landlords are currently very well-placed to seize the day. But that advantage won’t last forever. That’s why smart investors will start expanding their portfolios immediately, rather than waiting and then scrambling to try to do deals at the last minute.”

Mortgages for Business has carried out an analysis based on data from April and May this year regarding the reasons why investors were taking out buy-to-let mortgages.

The broker found that 30% of property investors did so with a view to expand their portfolio and grow their cash reserves. Comparing this to the information gathered at the same time last year, priorities were more focused on guarding against risk.

The research also indicated that 46% of landlords had been increasing the size of their loans – significantly higher than the long-term average of 38%.

The buy-to-let specialist says that, while sellers are more likely to come to the market before March 2021 – given buyers now have more money to spend – improving the stock of housing available to buy, this will not continue to favour those expanding portfolios forever.

Steve Olejnik also said: “This is all about expectations. At the moment, sellers are grateful for a sale and there are plenty of potential sellers who would put their property on the market if they thought they could get a deal done.

“Currently, sellers aren’t trying to grab the money that buyers had tucked away to pay for stamp duty – cash that was earmarked for the taxman. But the closer we get to March 2021, the more sellers are going to start making bids to grab the money that buyers had originally allocated to the government. 

“They will see the spare cash sloshing around the housing market and become less inclined to negotiate. By the start of next year, the stamp duty holiday will have made sellers much more determined to get a good price – where they might have been more inclined to offer discounts.  Landlords should be aware of that.”

The broker has also highlighted that their monthly mortgage volumes doubled in the run-up to the previous regulatory and fiscal changes, as landlords fought to beat the deadline.

Steve Olejnik continued: “This is all about expectations. At the moment, sellers are grateful for a sale and there are plenty of potential sellers who would put their property on the market if they thought they could get a deal done. 

“Currently, sellers aren’t trying to grab the money that buyers had tucked away to pay for stamp duty – cash that was earmarked for the taxman.  But the closer we get to March 2021, the more sellers are going to start making bids to grab the money that buyers had originally allocated to the government.  

“They will see the spare cash sloshing around the housing market and become less inclined to negotiate.  By the start of next year, the stamp duty holiday will have made sellers much more determined to get a good price – where they might have been more inclined to offer discounts.  Landlords should be aware of that.”

The new threshold for stamp duty has been increased from £125,000 to £500,000 in England and Northern Ireland. This will be in place until the end of March 2021.

Government introduces new regulations to kick-start housing market

New regulations have been introduced by the government to allow buyers and renters to view properties and move homes. 

Estate agents can now open, viewings can be carried out, and removal firms and conveyancers can restart operations.

David Cox, Chief Executive of ARLA Propertymark and Mark Hayward, Chief Executive of NAEA Propertymark comment: “It’s great news for consumers and the industry that the housing market is being opened up and people can let, rent, buy and sell properties again. The new regulations provide clarity to agents and will allow them to deal with pent up demand from consumers. 

“It’s also a step to reinvigorating the housing market and will be a boost to the economy. Safety, of course, will be paramount, and we would encourage everyone to ensure that they follow Government guidelines closely to protect others and themselves.”

Andy Marshall, Chief Commercial Officer, Zoopla, said: “We’re delighted that the Government has recognised the need to restart the property market, permitting estate agents to operate – within the parameters of common sense social distancing. Now is the time to get the market moving and to restore it to full health.

“With 373,000 transactions held up in the pipeline, amounting to £82bn in property value and £1bn of agent revenue, the Government’s move is set to be a catalyst for the broader economy. The multiplier effect of estate agency will stimulate cashflow for a network of industries, from removal firms to decorators to solicitors, benefiting the economy at both a local and national level.

Ben Beadle, Chief Executive of the National Residential Landlords Association (NRLA), said: “Tenants will now be able to look for a new home and move into it whilst those landlords who have unexpectedly faced empty properties will be able to put them back on the market.

“It is vital though that all viewings and house moves take place safely and in line with the Government’s guidance. We will continue to work with the Government, landlords and others to ensure that the risks of spreading coronavirus are minimised.”

new regulations to kick-start housing market
Government introduces new regulations to kick-start housing market

Steve Olejnik, managing director of Mortgages for Business, said: “We can’t know exactly what’s going to happen to the market, but we expect a temporary, short-term fall across London and the southeast in the region of about 15%. 

“But there’s no question that if you invest in bricks and mortar now, with a bit of haggling during the process, you are going to see a lot of long-term capital growth. 

“I think values will be back at February 2020 levels by the spring or summer of next year. Landlords who have not asked for a repayment holiday will be well set to snap-up some bargains with the help of lenders who have demonstrated a willingness to lend since the third or fourth week of the pandemic.

“Yields from the various types of property remained pretty steady throughout 2019 and suggest property will offer a better return than many other investments in the future – especially to smart, professional landlords looking outside the box at HMO investments.”

Grant Lipton, co-founder of London-focused developer Great Marlborough Estates, has commented: “The housing market re-starting is obviously positive news, but it will need more than a press release to give buyers and sellers confidence and so the government needs to look at a range of measures to kick-start activity including a Stamp Duty holiday.”

Mary-Anne Bowring, managing director at Ringley Group, comments: “There’s no reason buyers or renters shouldn’t be able to move home if they are able to do so safely in accordance with social distancing guidelines so today’s announcement is welcome news.

“However, we shouldn’t pretend this means the housing market has returned to its pre-coronavirus state. Lockdown is set to continue in some form for an unknown amount of time, the resulting economic disruption will likely weigh down on activity in the for sale market.

“A Stamp Duty holiday proposed by RICS and others would likely see a stampede in transactions while an extended Help to Buy will support some sales and in turn housebuilding.

“Yet the government should think long term and introduce policies to reflect Britain’s changing housing needs. Private renters are a fast-growing part of the housing market and need catering to.

“Yet politicians seem intent in squeezing buy to let landlords out of the rental market and the build to rent sector – a positive emergence – simply isn’t big enough yet to absorb all rental demand.

“If the government cut Stamp Duty surcharge for landlords it could help stimulate the market by encouraging BTL investors to snap up homes to then rent out. Many landlords also help support housebuilding through off plan sales.

“The housing market as whole will also have to get ready for a digital-first approach to transactions as more tasks and jobs are done remotely.”

Dan Wilson Craw, Director of Generation Rent, said: “Lifting restrictions on the lettings market is welcome for thousands of renters who have been stuck in unsuitable homes. But a reopened housing market cannot be an excuse to lift the evictions ban which is in force until late June.

“Despite the furlough and increased housing benefit, 2.6 million private renters are at risk of arrears with no way of paying them off once the economy recovers. Just a third of landlords have offered flexibility on rent payments, so most of these renters will face eviction as soon as the ban is lifted.

“The worry and stress of the pandemic is giving renters sleepless nights. Many have difficult decisions to make right now. If Robert Jenrick is developing a plan that will reassure them, we need to know what it is urgently.”

More than 85% of buy-to-let lenders are still lending to landlords

Published On: April 30, 2020 at 8:15 am


Categories: Finance News

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According to Mortgages for Business, there are still 42 buy-to-let lenders in the market, despite the current effects of COVID-19.

The specialist mortgage broker points out that at the peak of the Boris Bounce in spring, there were 49 lenders in the buy-to-let marketplace. With only seven no longer taking remortgage applications from landlords, this means that the number still willing to lend to property investors has fallen by only 14%.

Steve Olejnik, Managing Director of Mortgages for Business, comments: “While HSBC has recently announced it is no longer able to accept applications for buy-to-let mortgages, other lenders are out there.  

“We’ve seen lenders like Together Money and Vida Homeloans temporarily pull out of the market – but more than 85% of the lenders that landlords rely on are still trying to do their bit – as are we.  

“Four of the lenders that initially withdrew their BTL mortgages – Santander, Clydesdale, Precise Mortgages, and Kent Reliance – are now lending again.  There is no need for landlords to panic!  Yes, landlords looking to remortgage have fewer options.  But they still have plenty.”

The broker also highlights that Saffron Building Society withdrew from the market before the outbreak in March for unrelated reasons. They have indicated their intention to return to the market ‘later in the year’.

Lenders that stopped lending to landlords since the outbreak – and remain withdrawn from the BTL market – include: HSBC; Foundation Home Loans; Together Money; Vida Home Loans; Platform Home Loans; State Bank of India; and Furness Building Society.

Olejnik also comments“Lots of lenders have cut down the sorts of landlords that they will lend to. They’re pulling product ranges, tighten lending criteria, and increasing margins. But different lenders are de-risking against different kinds of landlord borrowers.  

“So, while some lenders are no longer lending to first-time landlords, there are still lenders who are.  A huge number of 80% LTV five-year fixed rate BTL products have been pulled from the market – about 90% of them.  But not all.  

“A good broker will be able to find you a competitive deal because those deals are still out there, for now.  My advice to landlords looking to remortgage is act sooner, rather than later.”

Buy-to-let rates slide to record lows

Published On: February 9, 2017 at 11:52 am


Categories: Finance News

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The most recent data released by Mortgages for Business has revealed that average buy-to-let rates for two and three year products have dropped to their lowest levels on record.

Rates for these products stand at 2.92% and 3.76% respectively.

Low Fees

However the report also shows that five-year fixed rates rose for the second month in succession, standing at an average of 3.77%, This is more than the average price of a three-year fixed rate for the first time since January 2015.

In addition, the Index found that January was a good month for short-term tracker products. Two-year buy-to-let tracker rates stayed at an average of just 2.81%-unchanged from December.

Buy-to-let rates slide to record lows

Buy-to-let rates slide to record lows

David Whittaker, CEO of Mortgages for Business, observed: ‘Longer term swaps in particular have risen in recent months, so it’s no surprise that pricing for five-year fixed rates have started to creep up. However, when looking at the bigger picture, these rates are still, on average, less than 1% more than their shorter term counterparts. As such, we continue to recommend them to customers as they not only provide a longer period of security against rate rises in an uncertain market, they can also save landlords the time and money it costs in remortgaging more often.’ [1]

‘At the very least, landlords should consider having some properties mortgaged on longer term fixes to spread risk. The fact that these rates are beginning to rise now should prompt landlords to take action sooner rather than later,’ Mr Whittaker added.[1]