The buy-to-let market has seen some significant changes recently, leaving many wondering what the future has to offer in a tough marketplace in 2018.
Many will be hoping for some good news, following policy changes that have taken the shine off buy-to-let as in investment opportunity.
Experts predict that the buy-to-let market is likely to focus on remortgages in 2018. According to UK Finance, buy-to-let lending for purchases has not increased for the last 18 months, and there is pressure on lenders to do more to encourage landlords to expand their portfolios. The industry is however expecting a surge of activity in April, as many of the 2-year fixed terms – set up in the rush to get deals done before the 3% stamp duty surcharge was introduced – mature and a significant amount of landlords will be looking at refinancing at this time.
Stricter lending criteria towards the end of 2017 has been causing problems for many landlords. Back in December, mortgage brokers accused Barclays of imposing unrealistic stress testing on its products, resulting in a significant reduction in approved buy-to-let mortgage applications. Some lenders also opted out of lending to portfolio landlords (those with four plus properties).
Low remortgage rates are available
The good news is there are lenders supporting landlords at this time by enabling them to fix in to low rates. Metro Bank has just reduced its rates on its buy-to-let products, with lower rates on two- and three-year trackers and fixed rate mortgages, and has introduced a new 60% LTV product in its five-year fixed range.
Chief executive Craig Donaldson stated: “Our competitive rates and turnaround times, combined with…top slicing for buy-to-let customers means we are hitting the ground running this year.”
ASTs policy changes offer stability and peace of mind
Metro isn’t the only lender offering an olive branch to borrowers. Accord Buy-to-Let is giving remortgaging landlords £500 cashback on selected loans from its choice of eight remortgage deals. Coupled with the recent announcement from Santander, confirming that they are extending their Assured Shorthold Tenancy (AST) policies from 12 to 36 months, landlords will be keen to benefit from some stability and peace of mind in a difficult marketplace.
It is likely that other lenders will be following the example of Santander, HSBC, The Mortgage Works, and a few less prominent lenders who are all offering up to three years for ASTs. Leeds Building Society has stepped up even further, with no maximum terms to boost their buy-to-let business and benefit landlords.
With lenders reviewing their product offerings, landlords should also be seeking out the less prominent lenders with the most attractive rates and products at this time.