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Categories
Mortgages

Buy-to-let industry beating all predictions

A recent dataset published by HMRC has shown that April’s stamp duty rise has hardly had any effect at all in terms of deterring new and existing landlords from buying up properties.

In fact, summer 2016 has been an extraordinarily busy time in the Buy-to-let sector with almost 25% of all residential properties sold in this period being bought either as secondary residential homes or as buy-to-let investments.

Of the 235,000 homes bought within the three month period encompassing July to September, nearly 60,000 were bought by private landlords or those seeking a second residence – and these are figures which have completely surpassed everyone’s predictions.

Here at UK Property Finance, we too have experienced a much higher-than-normal percentage of calls relating to buy-to-let financing options with more and more people thinking about buying new properties with a view to renting them out in order to provide a steady source of income. Work out the costs of a mortgage using our Mortgage Calculator UK

What Makes the Buy-To-Let Market So Attractive?

Although the government has taken steps to make life more expensive for prospective buy-to-let landlords, in an effort to encourage more people to buy their own homes, the fact of the matter is that buying a property to rent it out can still be a financially rewarding experience.

Many landlords buy properties with the intention of charging rates of rent which are significantly higher than the associated mortgage repayments as a means of providing a new source of income.

In addition to this, with house prices rising all the time, buy-to-let properties can also be thought of as a long term investment.  As the worth of a property rises, so does the rent, and the increase in equity means that a buy-to-let landlord can usually remortgage a property within a few years in order to finance the purchase of additional buy-to-let real estate.

Of course, there are a number of potential downsides associated with becoming a landlord, but these should in no way discourage anyone from considering the available options.

As leading property financers, UK Property Finance are able to source and arrange a wide array of short and long term borrowing options which are ideal for new and experienced landlords – whether they are first-time landlords, limited companies or seasoned property experts.

Our buy-to-let products are highly competitive with affordable repayment options and we also offer free and impartial expert advice to anyone thinking about any type of property investment whatsoever.

Categories
Bridging Loans

More Regulated Bridging Lenders Expected Next Year

According to a recent study conducted by Bridging & Commercial, more than half of the lenders who took part were of the opinion that the number of regulated bridging lenders would be significantly higher in 2017 than in 2016.

Unlike high street banks and various other loan providers, bridging specialists are not forced by law to operate under FCA regulations – although a recent poll seems to suggest that borrowers are more inclined to do business with companies that are regulated than those that are not.

Bob Sturges, who is head of communications and PR at Fortwell Capital claims that the regulated bridging sector is saturated – at least from the perspective of a non-regulated lender.

He says that the number of new lenders seeking authorisation from the FCA has started to slow down significantly in a move that many have attributed to basic market forces rather than a result of the recent EU referendum.

However, according to another study, published earlier this month, Bridging and Commercial uncovered that no bridging lenders at all had applied for authorisation since the Brexit vote.

Will there be an increase In Demand for Regulated Bridging Products?
With future market conditions looking somewhat unstable, it looks like many high street lenders will be tightening their belts in terms of approving new loans and this could prove to be an open door for bridging loan providers.

If this happens, then we are likely to see a significant rise in the number of new lenders appearing in a sector which some say is already overcrowded.

One problem associated with a saturated bridging market is that increased competition is leading to increased LTVs with lower rates and this is something that has inevitably led to an increased risk from the viewpoint of those underwriting the finance.

A further increase in regulated lenders may only make the situation worse.

According to Benson Hersch, CEO of the Association of Short Term Lenders, although the number of bridging lenders applying for authorisation has come to a standstill since Brexit, there are still many who are seriously considering applying for FCA approval.

One of the advantages of being a regulated lender is that it enables the finance provider to offer bridging on primary residences and self builds, which opens the doors to a much more diverse range of potential clients.

A main worry held by the FCA is that we might see more and more unregulated lenders offering bridging products that only regulated lenders should be providing.

If this becomes commonplace, then it is feasible to assume that the FCA could seek to have the entire industry regulated.

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