In the last year, the trend has continued for property investors to look to more complex types of property investment with the potential to deliver a stronger yield, and lenders have responded with a growing appetite for more unusual deals. Here are three Buy to Let trends that we have seen in 2019.
1. Holiday lets accepted by more lenders
The growing demand for holiday lets by investors has been met by a more accommodating approach from lenders and many more now allow a property to be let on a short-term basis. However, some lenders will still value the property on the basis of it being let on an AST, while some lenders appoint surveyors that will only provide an AST valuation, and this can result in an affordability calculation that doesn’t work for some investors. So, it’s important for brokers working with investors in holiday lets to partner with a specialist that understands the way that a lender will value a property, to ensure the right lenders are used and the clients achieve the leverage they need.
2. Lenders develop a larger appetite for HMOs
Not only are more mainstream Buy to Let lenders becoming more comfortable with lending on HMOs, but they are also extending their appetite for larger HMOs. We have worked with some lenders that are able to secure a loan on a 15-bedroom HMO for rates of between 3% and 4%. In previous years this type of property would have needed a lender with more of a commercial appetite and there would have been a premium to pay.
3. Increase in quality expat enquiries
UK property has been attractive for overseas investors this year, as the weak pound increases the buying power for people who are remunerated in foreign currencies. The quality of expat enquiries can be mixed, but we’ve seen a real growth in good quality enquiries from expats living in places like Dubai – and products have improved to meet this demand. There are now good options for expats who are first-time buyers and first-time landlords, and so there are fewer restrictions on expats who want to invest in UK property.
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