Future pension reforms are expected to trigger more growth in the private residential rental sector. In fact, experts are saying that properties owned by landlords will be worth £1 trillion in 2015. Yes, you read that correctly.
Of course there are additional factors also pushing the market skywards, yet with around 630 B2L mortgages currently available, I think it’s fair to say that lenders are preparing for a spike in interest (despite reports of a market cool down).
And there is good news for first-time landlords who have previously been seen as less attractive customers. Lenders are now opening up by offering higher LTV on their products, potentially making it easier for them to qualify for B2L mortgages.
Where newbie landlords had once been expected to raise significant funds to access the market, it seems they may now be able to buy without putting down hefty deposits. This is the kind of deal that only experienced landlords have been able to take advantage of. So opportunities for investment may be about to become more achievable for newcomers.
Recently the Mortgage Works announced an 80% LTV mortgage. Other lenders offering similar deals include Kent Reliance, Precise Mortgages and Yorkshire Bank.
Obviously there are other issues to consider such as age, income, whether a landlord is already a home-owner and their credit rating. Plus interest rates are probably going to be higher than normal mortgages.
Indeed the process isn’t straightforward, but this higher LTV trend is a chink of light for people thinking about climbing on to the landlord ladder for the very first time.
