Solutions News

Property professionals and residential homeowners have all faced their fair share of well-publicised issues, challenges and obstacles in recent times. However, data indicates that property in the non-residential markets – such as commercial property - have shown better resilience.

It’s no secret that economic stability is a key component in maintaining consumer confidence, and even more so when it supported by a highly robust housing market and a mortgage arena which is not suffering from wild rate swings.

Supply and demand is a constant topic of conversation within the wider UK housing market, but specifically within the private rental sector (PRS), especially as the former has appeared to shrink, and the latter has continued to increase.

Moving into 2024, we noted plenty of encouraging signs emerging from landlords who were demonstrating their ongoing commitment to the buy-to-let sector and looking through a longer-term lens regarding the performance and potential of an array of property investment types.

‘Why a movie poster campaign?’ you might ask.

Every mortgage tells a story. Whether that’s a family buying their forever home or a buy-to-let landlord using mortgage finance to grow an exciting business.

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.

Like any lender, it’s crucial to ensure that intermediary partners fully appreciate our strengths from a product, criteria and service perspective as lines can sometimes become a little blurred, especially when operating under the ‘specialist’ banner.

For some time, there has been a widely-held opinion that a significant number of landlords are seeking to make their exit from the private rental sector (PRS), forced out by higher rates, greater costs of running properties, and taxation policies which impact on overall profitability.

One area of the buy-to-let mortgage market, and landlord borrowers’ place within it, which will be clearly noticeable to advisers – particularly over the last 12-18 months – is the nature of rates and their impact on affordability, mortgage costs, and ultimately the profitability of those properties.

Diversification has always been a key word for any successful business operating across the mortgage arena, in a market which has successfully navigated its way through regulation, the credit crunch, increased regulatory scrutiny, the pandemic and the infamous mini-budget.

There’s no doubting 2023 was a challenging year for landlord borrowers and that a much higher interest rate environment presented the bulk of those challenges, particularly for those who were coming off deals and rates from two/three/five years’ back when we had historically low rates.

One of the most discussed areas within the current BTL market is the ongoing value attached to HMO’s, the yields being generated, and the costs attached to these.

The ongoing impact of tax, policy and regulatory changes are encouraging a greater number of landlords to explore tax efficient methods, alternative property types and limited company structures

At Foundation, when it comes to your client’s specialist residential cases, we have the expertise in managing those that might need extra consideration. 

One of the most consistent property types in delivering the highest yields in recent years has been houses in multiple occupation (HMOs) - but is it still an attractive option?

We have always operated in a solutions-driven market. However, the current economic climate dictates that to better the service progressively complex borrowing needs, lenders are looking beyond a tick box criteria approach to generate a range of solutions which match these ever-shifting requirements.

While it’s clearly the case that HMOs, for example, can still be described as a ‘specialist property type’ it would be somewhat naïve for us to think this part of the rental sector isn’t becoming more popular with landlords, as they react to a number of issues not least the growing demand for such properties.

The latest Money and Credit report showed that individuals borrowed an additional £1.6 billion in consumer credit in January, on net, following £0.8 billion of borrowing in December. This was suggested to be the highest net borrowing by individuals since June 2022 (£1.7 billion).

As a lender, over the past 12 to 18 months, we have taken steps to transform our underwriting approach by putting new systems and processes in place which enable us to say yes to more cases as opposed to a “computer says no approach”.

For landlords, many have gone back to basics in terms of delving deeper into their yield, void and cost calculations. When it comes to yield, houses in multiple occupation (HMOs) have historically topped these charts and proved an attractive option for the more hands-on landlords.

Our research with BDRC showed us the outlook of Landlords in each region. Find out what's happening in your region below. 

From a tenant demand, yield and cost perspective, the appeal of certain property types is likely to further intensify

Around 40% of homes in the UK have an Energy Performance Certificate (EPC) rating of C or above already, but are your borrowers considering a Green mortgage when they remortgage or purchase?

We are excited today to announce that we have launched an expanded panel of solicitors for specialist property cases, including HMOs, large HMOs, and multi-unit properties.