It seems that, for every landlord leaving the market due to extra taxation and regulation, at least two more are opting to remain and recoup those losses wherever they can. In response, lenders are now offering more BTL products than at any time since 2007. These include a ten year fixed rate loan with no exit penalty after five years, an 85% loan-to-value mortgage plus, from the same lender, an increase in their maximum portfolio size from 15 to 20 properties.
Other lenders, meanwhile, have been focussing on private sector tenants who receive housing benefits. Worried about benefit reforms back in 2013, many lenders obliged landlords to refuse to rent to those on benefits, regardless of employment or credit status. Following requests from charities, NatWest lifted this restriction in February, followed by Nationwide and the Co-op Bank in March and April respectively. Zoopla has banned the advertising of “No DSS tenants” properties on its website. NatWest has also extended the maximum term from 12 to 36 months, allowing landlords to offer tenants greater security.
The majority of tenants want to buy but struggle to raise a deposit. The good news for them is that 95%, two year fixed mortgage rates have reached an historic low of 3.09%. Combined with stamp duty exemptions, a new cohort of buyers is now in a position to buy.