Are Landlords Turning a Financial Corner?

Is landlord lending turning a corner?

The cost-of-living crisis has brought everything financial into sharp focus, and landlord lending is no exception. However, could it be turning a positive corner? The experts certainly seem to be hopeful. 

Increased number of Buy-to-Let Loans

Money comparison experts have said this week that the increased number of buy-to-let loans available is showing a really encouraging sign of recovery. 

There are around 2,400 buy-to-let loan products available at the moment, which is the highest number since July 2022, when there were 2,746. This time last month there were only 2,246 available, so 150 more have hit the market in just a month!

It may not seem like much, but this gentle creep upwards is showing a renewed confidence in the market from the lenders – let’s just hope they’re putting their money where their mouth is!  

As well as having far more products on the market, the products are also getting far more competitive. You may have noticed how the supermarkets are getting pretty cut-throat with their advertising, vying to be the cheapest provider of a trolley full of basics. Well, it’s not just cornflakes and cucumbers that are being promoted, the banks are not far behind with all of them looking to provide the very best options for anyone looking to secure a loan. 

BTL mortgage rates are falling, and lenders seem to be looking at longer term offers, with 914 five-year fixed deals currently available compared to just 632 two-year fixed options. It’s clear that lenders are looking to entice new business and to keep landlords in the market, and according to Moneyfact’s finance expert Rachel Springall, this is great news for anyone looking to refinance:

QUOTE: It is encouraging to see buy to let product choice gradually recover from the shock surrounding the fiscal announcement. The choice of deals to landlords plummeted and both the average two and five-year fixed rates rose to 6.0% towards the tail end of 2022, but thankfully, both rates have slowly dipped below this level.’

She added: ‘The drop in average buy-to-let rates appear more subdued than seen within the residential mortgage sector, but lenders have made moves to entice new business despite some investors’ concerns surrounding rental income margins.’

Landlord failure leads to fines

One landlord who’s probably not feeling overly financially positive is Luton-based Sarfraz Yousaf, director of Poplar Homes Ltd. Yousaf and Poplar Homes Ltd were hit with a combined fine of £6,791 after Luton Borough Council received a complaint about a property which was plagued by a litany of issues, including:

  • No fixed heating provision
  • No hot water
  • Inadequate water services
  • No smoke detectors 
  • Inappropriately connected electric cooker

On top of all that, when asked to produce documentation, including a Gas Safety Certificate and an EICR, the landlord was unable to do so.

Yousef and Poplar Homes Ltd pled guilty at Luton Magistrates Court for the offences of not providing the correct and necessary documentation. Poplar Homes was fined a total of £3,977, plus a victim surcharge of £1,231, and costs of £508, whilst Yousaf was fined £768, plus a victim surcharge of £307, resulting in a total fine of £1,075

On top of the fine, the court ordered that all the required improvements to the property were carried out, and the council have pledged to monitor the situation to ensure that the improvements are completed.

Councillor Tom Shaw’s Luton Borough Council portfolio holder for housing, said: ‘When we hear of a complaint against a private landlord we will always investigate the situation. Part of this requires us to be satisfied that the necessary documents are held and failure to demonstrate that is a serious offence in its own right.’

QUOTE: The quality of the property investigated was not of a sufficiently high standard and we have demanded that the landlords resolve this as quickly as possible. Being a landlord is a serious business. Tenants deserve to be treated properly and we will do all we can to make sure this is the case.’

So, take heed of this monumental (and costly) slip up. Clearly, ensuring that your property is well maintained and safe for your tenants is key, but making sure that your documentation is up to scratch is really important too. Mashroom’s document storage tool is free, and available to assist should you need a little help getting your paperwork in order. 

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