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Mortgage Strategy BTL questions

Journalist: Natalie Thomas, Freelance

ended 19. October 2022

Hello, I am writing a feature for Mortgage Strategy magazine about the BTL market. It would be great to hear your thoughts on all of some of the below questions - thank you. 
 

1, Some reports suggest that landlords are leaving the market en masse, is this the case?
2, What are some of the challenges currently facing landlords and how are they overcoming them?
3, Are there any areas doing particularly well at the moment? (holiday lets for example)
4, How do you see the market changing moving forward? Which areas will do well?

3 responses from the Newspage community

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Editor
Imran Hussain
Director at Harmony Financial Services
1, Some reports suggest that landlords are leaving the market en masse, is this the case? Some highly leveraged landlords are now leaving the market especially with the tax changes now in place with the mortgage interest rate relief gone for any homes owned in personal names. 2, What are some of the challenges currently facing landlords and how are they overcoming them? The biggest challenge landlords face right now is the changes to stress tests and rental incomes require to even refinance their current portfolio and rising costs and for some the only options they have are to either sell or increase rents which come with their own set of problems.
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Editor
Aaron Strutt
Product and Communications Director at Trinity Financial
Many landlords are shocked that rates have gone up so much and it is so hard to refinance at the moment. Most do not want to increase their rent and make tenants pay even more. We are at the stage where buy-to-let makes up around twenty per cent of business for many of the bigger lenders and broker firms and this will reduce even more until the market returns to some sort of normality. Having to put down a 50% deposit to access to buy-to-let mortgage becuase of the tight stress tests and lack of products is basically a withdrawal from the mainstream market.
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Paul Neal
Mortgages & Equity Release Advisor at First Choice Financial Services
The difficulty we are now finding is around affordability, many lenders have changed their ICR's and with now rates being significantly higher making many loans now no longer affordable, the only way is for landlords to either borrow less or increase the rent to the tennants.