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BTL landlords urged to invest in property sooner rather than later

Buy-to-let landlords are being urged to take advantage of the stamp duty tax savings announced in the chancellor’s summer statement by investing in property ‘now’. 

Many investors continue to be drawn to the buy-to-let market as the returns routinely outperform those of other investments, and new investment in property sooner rather than later will set many people in very good stead, according to Mortgages for Business.

The mortgage broker says that BTL landlords should start searching the housing market for potentially ‘undervalued’ properties before those merely moving up the property ladder are ready to do the same.


Steve Olejnik, managing director of Mortgages for Business, commented: “Clearly, landlords need to take advantage of the stamp duty holiday before the window closes in March next year.  Property investors are in a better position to qualify for a mortgage now that reduced stamp tax allows them to wield a larger deposit. Furthermore, if the measures Rishi Sunak has put in place underpin property values, the cut will help those looking to remortgage as well. 

“Less obviously, landlords may not appreciate they need to act while they are well-placed to move in a way that owner-occupiers are not. We know property investors have been remortgaging with a view to picking up some bargains. Owner occupiers have not been doing the same.  

“Landlords have been preparing since the start of the lockdown, remortgaging to enlarge potential war chests with an eye on bagging bargains in the future.”


Given that first-time buyers do not have that flexibility and owner-occupiers have not been remortgaging in the same way, BTL landlords are currently very well-placed to seize the day.  But that advantage will not not last forever.  

“That’s why smart investors will start expanding their portfolios immediately, rather than waiting and then scrambling to try to do deals at the last minute,” said Olejnik. 

An analysis carried out by Mortgages for Business, based on data from April and May this year, found landlords who were remortgaging were primarily doing so to build an investment war chest.  

The broker found 30% of property investors were taking out a buy-to-let remortgage with a view to expanding their portfolio and growing their cash reserves. At the same time in 2019, landlords were more interested in guarding against risk.  The research also indicated that 46% of landlords had been increasing the size of their loans – significantly higher than the long-term average of 38%.

Olejnik added: “This is all about expectations. At the moment, sellers are grateful for a sale and there are plenty of potential sellers who would put their property on the market if they thought they could get a deal done.  

“Currently, sellers aren’t trying to grab the money that buyers had tucked away to pay for stamp duty – cash that was earmarked for the taxman. But the closer we get to March 2021, the more sellers are going to start making bids to grab the money that buyers had originally allocated to the government.  They will see the spare cash sloshing around the housing market and become less inclined to negotiate. 

“By the start of next year, the stamp duty holiday will have made sellers much more determined to get a good price – where they might have been more inclined to offer discounts.  Landlords should be aware of that.”

Furthermore, Mortgages for Business says that their monthly mortgage volumes doubled in the run up to previous punishing regulatory and fiscal changes – as landlords fought to beat the deadline.

Olejnik continued: “Over the last few years, property investors have been the chancellor’s whipping boy while first time buyers have been the government’s golden child. Landlords have been hit by higher taxes and tighter restrictions on borrowing. Ahead of those restrictions coming in, landlords flooded the market.  

“Now, some restrictions are temporarily easing. Property investors know that, come March, those restrictions will be back in place.  As a result, in the run up to the deadline, the monthly volume of deals is going to double once more, making it much less certain loans will come through in time.

“Furthermore, while lenders have slightly less appetite to lend than they did pre-Covid, that caution is currently only manifesting itself in the form of more underwriting questions.  That will not last either – rates will only rise between now and March 2021 as competition between lenders eases. It’s been a long time since the last lender price war now. So, if you’re a landlord, and you’re thinking of expanding your portfolio, do it now!”

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Poll: Are you planning to add to your property portfolio this year?


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    let's see what happens in a year

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    I won't be rushing for a BTL mortgage, I will wait for an absolute bargain, or the huge house price crash that's just around the corner when big recession and massive unemployment hits.
    Anyway because of the big pent up demand right now and probably the stamp duty suspension, many vendors and agents in my area have put up ridiculous asking prices.
    They can stick it sideways, I will wait..Slowly, slowly catchy monkey.
    More fool the idiots buying at inflated prices right now, you be sorry and will lose out!

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    • 17 July 2020 12:42 PM

    Say no more!

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    S24 and an anti-landlord government. New regs coming in all the time. Licensing next! I have two tenancies where the tenant is not making any attempt to pay rent for the past 6 month’s. Waiting to see if I can get a hearing at the court. No evictions until August at the earliest. Service charges are increasing greatly each year. CGT changes mentioned this week.
    So rush in and save a few grand on stamp duty?

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    Not a good time to buy right now, wait until the end of the year or even next year, then buy for cash or with very small borrowings

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    Hurry up and buy more headaches.... That'll be shining bright! Its sell, sell, sell for me... Why would anyone want to buy into the landlord game these days? Time to move on to pastures new for me... I've had enough.


    True, LLs take on big risks and debt to get in this game, and now every year they are being hit from all sides, via more draconian legislation and taxes, no support, etc, etc, from all sides, it's fast becoming too much of a risk and too little a R.O.I. It has become a mug's game for many investors.
    Well, one good thing is it will all eventually backfire on mortgage lenders, councils, shelter, and the government and all the anti-landlord associations when LLs stat to sell up in droves. You cant keep battering the whole sector without it having drastic consequences eventually, what goes around comes around.
    Good luck dealing with all the homeless and lost revenue you idiotic prats.

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    • 17 July 2020 18:12 PM

    If you have cash then still worth investing in the PRS despite all the problems.

    But BTL mortgage brokers should be ignored.
    They wouldn't be the ones facing repossession and bankruptcy if LL are unable to service mortgages caused by feckless rent defaulting tenants.


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