UK Landlords Looking to Expand Portfolios

A report from mortgage broker Mortgages for Business reports that 60% of United Kingdom (UK) landlords intend to expand their rental businesses in 2012, while only 3% of …

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A report from mortgage broker Mortgages for Business reports that 60% of United Kingdom (UK) landlords intend to expand their rental businesses in 2012, while only 3% of investors plan on cutting back on their portfolios. Experts say the growing interest in rental property expansion will help prospective renters by placing more demand in the market. Interested buyers are clamoring for more help from lenders and have voiced a need for more specialty loan options. Even so, buyers remain optimistic and analysts say confidence continues to rise in the market. For more on this continue reading the following article from Property Wire.

Over half of UK landlords planning to expand their property portfolio in next the next months and want more support from lenders, it is claimed.

Six in ten property investors plan to expand their portfolios by the end of the year and of those 84% are planning on purchasing residential investment property, according to specialist mortgage broker Mortgages for Business.

It found the 60% want to expand and feel mortgage lenders should be doing more to support them.
The majority are planning to purchase more houses and flats by the end of the year, thereby increasing the supply of rental properties to help cater for demand which continues to outstrip supply.

Only 3% of investors are planning to reduce their portfolios over the next six months, down from 6% last quarter.

‘Landlord appetite for buying residential property is high. This will support the private rented sector and ease the strain on would be renters chasing too few properties,’ said David Whittaker, managing director at Mortgages for Business.

The firm’s research also shows that complex buy to let property is becoming increasingly popular probably due to the more attractive yields compared to vanilla buy to let properties. Some 25% of respondents said that they were considering purchasing either HMOs, multi-units or semi commercial property, or a combination of the three.

When it comes to lenders their main gripes were with rates, fees and LTVs. Landlords are looking for buy to let mortgages that cater for more specialist scenarios including more products for limited company applicants, products for holiday lets and more lending to expats.
 
Landlords were also interested in seeing more case by case underwriting rather than computer based lending decisions.

Just over half, 54%, of investors who are planning to expand revealed they will need to refinance their existing properties. Of these, 20% are likely to struggle to secure finance because of a lack of equity, reflecting the dearth of high LTV mortgages in the market.

Some 8% revealed they have been asked by lenders to refinance elsewhere, largely as a result of RBS which is looking to reduce its exposure to property and Bradford & Bingley which is looking to exit the market entirely.

‘Landlords are bullishly confident about the prospects of the buy to let market over the next six months. There are a huge number of would be owners being displaced into the rental market every year, which has kept tenant demand sky high and pushed yields on private rental property over the 6% threshold,’ explained Whittaker.

This article was republished with permission from Property Wire.

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