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Portfolio landlords

Journalist: Anna Sagar, Mortgage Solutions / Specialist Lending Solutions

ended 06. March 2024

Interested in speaking to mortgage brokers about trends with portfolio landlords. 

  • Are brokers seeing more portfolio landlords coming to the market with more properties than before? i.e. previously they would have done three to four but not will do 10 to 20 as
    • If so, why?
  • What is the lending landscape like for portfolio landlords? What would you like to see from portfolio landlords?
  • What advice would you give to portfolio landlords coming to the market? 

3 responses from the Newspage community

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Editor
Aaron Strutt
Product and Communications Director at Trinity Financial
The property market in general has picked up in recent months and the buy-to-let lenders are more positive.
Most of the buy-to-let mortgages we arrange are for portfolio landlords and while many of them are refinancing to get a better deal, some are buying.
More buy-to-let lenders are offering much cheaper rates and setup fees than they were, so landlords need to ensure there are no other options before taking a product with a really high percentage-based arrangement fee. BM Solutions has a five-year fixed rate at 4.20% with a £3,999 arrangment fee meaning some buy-to-let are not much more expensive than residential rates at the moment.
Many of the smaller building societies are also keen to refinance landlords, like the Family Building Society. They can take a view of the overall portfolio and take cross charges to bring down the overall loan-to-value so landlords can get a better rate.
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Austyn Johnson
Founder at Mortgages For Actors
With portfolio landlords, the main enemy is taxation and mortgage rates. If the rates are too high, they dont make a profit. If they are low, they make a profit and are then taxed on the greener year. It seems that at every turn, landlords are being pushed about and forced into being very shrewed businesspeople. If their business is not water tight, they have no chance of weathering the storm and we have seen plenty of BTL repossessions over the last couple of years. Often these are from the hobby landlord wh hasnt really built up a war chest for when things go awry. Part of what we do is future planning for landlords and sometimes, pulling a bit of equity out to use as security money can make the world of difference. You know that when you are struggling with mortgage rates, thats when the tenant will leave and your income will stop. Thats how the world works.
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Akhil Mair
Director at Our Mortgage Broker
We're seeing more portfolio landlords entering and remaining in the market with larger property portfolios. Previously managing three to four properties, it's now common to see portfolios with 10, 20 and 30+ properties.

This trend stems from rising rental demand and favorable market conditions. Low ish interest rates and potential long-term returns are driving landlords to expand and diversify their holdings.

Lenders are adapting to meet the needs of portfolio landlords with stringent affordability tests and underwriting checklists. This reflects a commitment to responsible lending.

Advice for new portfolio landlords: Conduct thorough research, stress test your property portfolios often, assess market conditions, and consider financial implications carefully. Maintain strong communication with brokers and lenders, stay updated on regulations, and prioritise diversification and risk management.