Underwriting Portfolio Landlords Mortgages

David Lawrenson of LettingFocus is not scared by institutional investors getting into build to rent nor by new mortgage lending criteria for portfolio landlords.

Build to Rent

I am interested to read in the press that the big Build to Renters are now going for a more basic accommodation offering in the student private rented sector, which suggests that other evidence pointing to the fact they are having rather hard times with the more luxury type of accommodation they have provided hitherto was true.

Readers of this column will know that I have said for years that the big institutional investors would always struggle to compete with private buy to let landlords because their cost base is too high. It looks like I am being proved right.

Of course, the government has tried to help the big Build to Letters by increasing taxes on buy to let landlords in recent years, (all the while repeating the lie that the tax changes were really only about helping first time buyers). But this skewing of the tax playing field is still not enough to help the institutional Build to Letters compete with private landlords. They will continue to struggle.

Underwriting Portfolio Landlords and their Mortgages

Just around the next corner, at the end of September in fact, the screw is to be tightened yet further for private landlords, as mortgage lenders will now have to move to more detailed individual underwriting for landlords who have four or more properties. (The dozy government and regulator’s thinking on this was that portfolio landlords were somehow more vulnerable to going bust in the event of a property crash, despite there being no evidence to support this thinking nor any proof that they are more highly geared than other landlords).

It will be interesting to see how this plays out in practical terms as lenders are only just making their policies known. But it will clearly mean more disclosure for landlords of their personal financial circumstances and more work for lenders who will have to assess and process more information. As a consequence, we expect the more “dabbling lenders” to exit the market, leading to less competition and less good mortgage deals for portfolio buy to let landlords seeking mortgage loans. Ah well!

The Future is Still Bright

Many folk think this, and the tax changes, are all terrible news and that huge numbers of buy to let landlords will all sell up en masse and the private rented sector will shrink.

I’m not sure.

But, so what if some do now decide to give up?

The resulting shortage of private rented accommodation that would result would surely lead to rents rising much faster than they have in the last five years (when they have broadly only risen in line with inflation in most places outside London).

Fast rising rents will be good news for those landlords who remain in the sector.

The trick in any business is to better than your competitors. Private renting is the same.

The way ahead for buy to let landlords is to be better than other landlords – to buy the better type of property and to be more efficient at what you do.

This is our business. We show private landlords how to do better. Get in touch to see how we could help you.

ABOUT LETTINGFOCUS

Services for Private Landlords

We help landlords and property investors by showing them how to make money in the private rented sector using ways which are fair to tenants and which involve minimal risk.

Our advice is completely independent. We take don’t commission payments or fees from anyone, ever.

Services to Businesses and the Public Sector

We advise a range of organisations including banks, building societies, local authorities, social housing providers, institutional investors and insurers. We help them develop and improve their services and products for private landlords. David Lawrenson, founder of LettingFocus, also writes for property portals, speaks at property events and is regularly quoted by the media.

HOME PAGE OF THIS BLOG: Blog

THE HOME PAGE OF THE MAIN SITE: http://www.LettingFocus.com

For general information on our CONSULTING SERVICES: Consultancy and Seminars

For ONE TO ONE PRIVATE CONSULTANCY FOR PRIVATE LANDLORDS: Property Advice

CLIENT TESTIMONIALS – from both organisations and private landlords: Testimonials

IN THE MEDIA: Recent Press Coverage

BOOKS:

“SUCCESSFUL PROPERTY LETTING”:

Our book is the highest selling personal finance and property book in the UK. Click here to Find Out More and Buy it. And if you are from an organisation and would like to bulk buy, please ask us for special rates.

NEW BOOK – “BUY TO LET LANDLORDS GUIDE TO FINDING GREAT TENANTS”:

Get this great new guide here, which covers everything you’ll ever need to know to avoid either you or your letting agent getting anyone other than the perfect tenant. Click Here to Buy It.

BOOK FOR TENANTS:

Kids going off and renting for the first time? My Book for Tenants is also Available

TO JOIN OUR FREE NEWSLETTER MAILER which goes to over 3,950 people (as at Jan 2017) just send an email to [email protected]

We do not send spam or sell our mailing list to advertisers, though we occasionally mail landlords about good products from third parties. Please put us on your “white list” to ensure you receive our emails.

OFFERS ON PRODUCTS FOR LANDLORDS and TO ADVERTISE YOUR PRODUCTS to LANDLORDS: Landlords Resources

PERUSE LAST TEN BLOGS BY GETTING THE RSS FEED: Click Here

NEXT SEMINAR EVENT FOR LANDLORDS: Landlord and Property Letting Seminar

TWITTER PAGE My thoughts on property, personal finance, plus a lot of other random things: Twitter 

Copyright of Blog: David Lawrenson 2017. Please link to us here or quote us. We actively pursue copyright infringements. The blog is updated roughly every two weeks.

Leave a Reply