Lenders pull out of buy-to-let - here's what landlords can do

27 April 2020

Banks are restricting who they lend to, but there is good news for landlords


Landlords face reduced choice when remortgaging as many banks have stopped lending to property professionals due to the coronavirus outbreak.

Some banks have stopped lending to landlords altogether, while others have begun to restrict which types of property investor they will deal with.

There are now no lenders prepared to underwrite low-deposit landlord remortgages of 85% LTV, compared to three at the same point in March.

The number of lenders who will lend to HMO landlords has fallen by 44%, from 27 to 15, and only 16 banks will provide buy-to-let tracker homeloans, down from 28 in March.

There has also been a 26% drop in banks providing first-time landlord loans, from 47 to 35.

Seven out of 49 buy-to-let lenders are no longer lending to landlords at all.

This list is HSBC, Foundation Home Loans, Together Money, Vida Homeloans, Platform Home Loans, State Bank of India and Furness Building Society.

But Steve Olejnik, managing director of mortgage broker Mortgages for Business, says: "There is no need for landlords to panic. Yes, landlords looking to remortgage have fewer options.  But they still have plenty.”

I am a remortgaging landlord, what should I do?

Most landlords will still be able to find a mortgage, though it might not present as good a deal as those available before coronavirus due to reduced competition.

While lenders are becoming more restrictive, they are not all singling out the same landlords. A broker can help sift through these banks to find the most appropriate one.

Olejnik says: “My advice to landlords looking to remortgage is act sooner, rather than later. You may have to answer a few more questions when you’re applying for a remortgage that you would have had to last month – but a broker will still be able to find you a deal.  That’s how to get through this.”

Four lenders that withdrew from buy-to-let in previous weeks have now returned: Santander, Clydesdale, Precise Mortgages and Kent Reliance.

Why are lenders doing this?

Reasons include nervousness about falling house prices, the coronavirus lockdown meaning surveyors and valuers cannot access properties and a reduced number of staff at lenders needed to process loans.

First published on 28 April 2020

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