Coronavirus - Should landlords apply for a new or re-mortgage?

Emphatically yes! One big difference between the challenges of 2020 and the economic turbulence of 2008’s credit crunch is that there is no issue with the liquidity for banks and building societies.

They have the means and the willingness to lend. However, what we are seeing are disparities with how each lender responds to the current situation. Some lenders have been impacted from a service perspective more than others due to staff shortages.

Your broker

We are lucky in our industry that we can work remotely, and as such are here to help our clients at this time.

Intermediaries can access the various lenders on the market and will be able to help navigate through these options at this time for you to find the best solution.

Help for Landlords

The government has confirmed that landlords will also be able to apply for a mortgage payment holiday.

The Prime Minister did not make the announcement in his daily press briefing this, but he confirmed that tenants would get protection against eviction.

Soon after the conference the Ministry of Housing, Communities and Local Government announced on Twitter that mortgage forbearance would be extended to landlords.

The development came after UK Finance stated earlier today that the three-month payment holiday “currently” only applied to residential borrowers.

However, Boris Johnson hinted that landlords might get protection during Prime Minister’s Questions when asked about the eviction of tenants.

He said he wanted to ensure that the problems were not pushed on to “other actors” in the economy.

Buy-to-let lending is still getting cheaper

The cost of buy-to-let mortgages have fallen year-on-year, research from Property Master has found.

The biggest fall was for 5-year fixed rate buy-to-let mortgage offers for 65% of the value of a property, which fell by £48 per month between February 2019 and February 2020 for a £150,000 mortgage.

Another fall in the cost of borrowing is very good news for landlords.

We know that there are landlords languishing on expensive SVR mortgages as the uncertainty around Brexit and political instability has put them off moving on to a more competitive fixed rate.

With the current record low rates on offer these landlords should act quickly because if the “Boris bounce” becomes a reality it may allow interest rates to begin to rise back to more normal levels.

Landlords need to seek independent advice

The Financial Conduct Authority’s report into the mortgage market found that around 34% of borrowers were unable to see that they were eligible for a cheaper deal.

On average, these consumers paid around £550 per year more over the introductory period compared to the cheaper product. But this poses a question: is the cheapest mortgage always the right mortgage?

With price comparison websites now well-established, some consumers have started to make important financial decisions based solely on price.

But while a decision between two retailers selling the same model of toaster, for example, is simple, such choices are far more difficult when it comes to the world of financial products. The cheapest insurance deals do not necessarily offer the best levels of cover, and the lowest mortgage rates may not be the best deal for a borrower’s circumstances

The mortgage market is both complex and diverse. While high street lenders may have the largest profiles, there is a raft of small and specialist lenders fighting for business.