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The evolution of Solutions
Landlords, and the private rented sector in general, have become accustomed to some constant buffeting over the years, be this through regulatory and legislative change, global events and/or domestic economic headwinds.
These events have led to greater levels of resilience being formed throughout the sector and a lending community which continues to evolve effectively to meet new financing requirements and landlord approaches.
Looking forward, and not too far into the future, the buy-to-let landscape is set to become even more complex. This is largely due to an increasing number of professional landlords looking to diversify and turning their attention towards larger HMOs, mixed-use property (part-commercial) and multiple properties under one title. Inevitably, such transactions do come with additional legal layering and the need for a more specialist lending approach, but the rub comes in the fact that they have the potential to generate stronger yields.
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For lenders who have the foresight, capacity, ability and appetite, it’s all about remaining as agile as possible, while at the same time understanding the longer-term picture, and keeping an eye on the opportunities emerging from a landlord community whose needs and demands are constantly shifting. And, importantly, being able to act on them in a competitive and responsible manner.
Here at Foundation Home Loans, by catering for increasingly complex property types - and non-vanilla borrowers – we are demonstrating our commitment to keeping up with landlord’s ongoing quest for higher yields in the face of a more restrictive environment. A quest which serves to highlight a greater understanding of what property types are needed, in what locations, and how best to optimise their portfolios.
For lenders who implement a manual underwriting approach, this offers the opportunity to incorporate a more holistic approach when assessing individual cases. An approach which allows them to support an array of complex landlord demands and reach more flexible and accountable lending decisions now, and in the future.
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Our experience of 2024 so far suggests that while it’s fair to say some landlords are selling properties, this is nothing new. Especially for the more professional end of the landlord spectrum as they look to rebalance, shore up, or expand their portfolios in other aforementioned areas.
Such landlords maintain a much longer-term view and while they may be quick to diversify their holdings, this is more with longer terms gains in mind rather than a quick win. This philosophy is also one shared by lenders who maintain a successful track record within the BTL sector. After all, even if a certain approach is working, there’s no time or room to rest on our laurels as we have to constantly embrace change where appropriate and where it can make a lasting impression.
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