Landlords should be aware

Landlords are being urged to seek advice before taking a mortgage holiday through concerns many are leaping into the ‘break’ without considering the full consequences.

Taking the three-month break from repayments could impact current and future applications. What’s more, lenders are and will reconsidering applications when a landlord had asked for a repayment holiday on their existing loans.

Lenders expect landlords to be able to cover void periods under normal circumstances – where a property is empty, and a landlord isn’t getting any rent – so they won’t take kindly to landlords trying to take advantage of them just to build up some cash reserves.

As an example, one borrower with three live cases with their lender approached them for repayment holidays on another, existing loan. The lender immediately cancelled all three live cases.

Coronavirus - Should landlords apply for a new or re-mortgage?

Emphatically yes! One big difference between the challenges of 2020 and the economic turbulence of 2008’s credit crunch is that there is no issue with the liquidity for banks and building societies.

They have the means and the willingness to lend. However, what we are seeing are disparities with how each lender responds to the current situation. Some lenders have been impacted from a service perspective more than others due to staff shortages.

We are lucky in our industry that we can work remotely, and as such are here to help our clients at this time.

Intermediaries can access the various lenders on the market and will be able to help navigate through these options at this time for you to find the best solution.

Buy-to-let

There is no doubt the developments in the mortgage market in response to the coronavirus crisis are moving at a frenetic pace. Helping clients is crucial for everyone in the industry currently, so we are keeping on top of all of these updates to help navigate the best options for your individual circumstances at this time.

We have also seen most of the buy-to-let lenders now set up for payment holiday requests, with one of the largest in Barclays having built a system from scratch to help process these.

This helps to provide another option for landlords where your tenants cannot make their rent payments due to Covid-19 related financial problems

Buy-to-let lending is still getting cheaper

The cost of buy-to-let mortgages have fallen year-on-year, research from Property Master has found.

The biggest fall was for 5-year fixed rate buy-to-let mortgage offers for 65% of the value of a property, which fell by £48 per month between February 2019 and February 2020 for a £150,000 mortgage.

Another fall in the cost of borrowing is very good news for landlords.

We know that there are landlords languishing on expensive SVR mortgages as the uncertainty around Brexit and political instability has put them off moving on to a more competitive fixed rate.

With the current record low rates on offer these landlords should act quickly because if the “Boris bounce” becomes a reality it may allow interest rates to begin to rise back to more normal levels.