2-minute read
If you’re a first-time landlord, you may find it more difficult than before to get your venture off the ground, new research suggests.
This is because the finance available to those undertaking a property investment for the first time is being restricted.
A report from financial group Moneyfacts.co.uk found that the number of mortgage products available to first-time landlords has dropped from more than 1,000 in the past two years.
In contrast, the overall number of buy-to-let products has increased during the 24 months from April 2015 to April 2017.
Charlotte Nelson, a finance expert at Moneyfacts.co.uk, said: “Over the past few years the number of buy-to-let products on the market has increased, but despite this new landlords have missed out on the buy-to-let boom.”
She added that this could be explained in part by the uncertainty that exists in the market at the moment, which has made some providers slightly more risk-averse.
“By their very nature, first-time landlords lack experience in managing rental properties,” she said, “and this is considered more of a risk now than perhaps it once was.”
Concerns about the buy-to-let market overheating have led to several new rules being applied to the market, from additional taxes to tighter lending criteria for landlords.
Ms Nelson noted that tougher affordability rules which have reduced the amount landlords can potentially borrow are being felt in the market. The average two-year fixed rate at 70 per cent loan-to-value has risen by 0.14 per cent to 3.16 per cent since January.
“This could be disproportionately affecting first-time landlords, who may want to borrow at higher loan-to-values.” she said, as the extra regulation means borrowers will face added checks and questions about their finances.
As for advice, Ms Nelson concluded that “Any would-be landlords will need to do their homework and prepare in advance to ensure they can pass with flying colours and get the buy-to-let mortgage they want.”
Have you noticed changes in the offering for landlords over the last two years? Let us know in the comments.
Over 200,000 UK landlord policies, a 9/10 customer rating and claims handled by an award-winning team. Looking to switch or start a new policy? Run a quick landlord insurance quote today.
Start your quoteWe create this content for general information purposes and it should not be taken as advice. Always take professional advice. Read our full disclaimer
Keep up to date with Simply Business. Subscribe to our monthly newsletter and follow us on social media.
Subscribe to our newsletter6th Floor99 Gresham StreetLondonEC2V 7NG
Sol House29 St Katherine's StreetNorthamptonNN1 2QZ
© Copyright 2021 Simply Business. All Rights Reserved. Simply Business is a trading name of Xbridge Limited which is authorised and regulated by the Financial Conduct Authority (Financial Services Registration No: 313348). Xbridge Limited (No: 3967717) has its registered office at 6th Floor, 99 Gresham Street, London, EC2V 7NG.