Portfolio landlords remortgaging to capital raise for purchases – Fleet

It said landlords were interested in raising capital through remortgaging to find the funds to extend their portfolios for those properties with strong rental yields.

The lender believes there could be a drop in the supply of properties and argued that was likely to mean rents will inch up further.

This, it argued, could increase the attraction for landlords to add to their portfolios, particularly when coupled with the “relatively benign” house price market.

Forecasts before the Prudential Regulation Authority’s portfolio lending rules were implemented suggested larger landlords would become more prevalent, and this appears to be the start of that process.

Market fundamentals

Fleet Mortgages chief executive officer Bob Young (pictured) said: “We’ve seen a noticeable uptick in the numbers of landlords talking to us about their purchase plans, and I suspect that many professional and portfolio landlords will be increasingly looking to capital raise in the months ahead.

“Advisers are likely to be in demand for this type of work and should be aware of the portfolio landlord lending options that are available.”

He continued: “A number of market fundamentals look likely to move in favour of those seeking to add to portfolios by purchasing well-priced properties with decent yields. First, as the most recent ARLA research outlines, it appears the number of private rental sector properties on agents’ books has dropped, which means rents only have one way to go, as supply gets tighter.

“Second, it’s obvious that agents are already seeing rent rises in almost a quarter of their managed properties. Add into this, the relatively benign house price environment and it’s no wonder landlords want to add to portfolios,” he added.

Young concluded that this was a “ripe opportunity for these landlords” and that advisers had a clear opportunity to support their ambitions in this area.