A quick Google search reveals this, or perhaps a variation on this, was first found in a 1959 novel entitled, ‘The Tents of Wickedness’ by Peter De Vries.
The reason I write this is I have a feeling that summer 2023 has morphed not so much into ‘The Summer of Love’, but ‘The Summer of Nostalgia’, as we wrap ourselves up again in a world that no longer exists, but which felt like a better time.
How else might we explain the incredible music of Summer 2023 being Elton John at Glastonbury, Pulp at Finsbury Park, Blur at Wembley, and a raft of other acts who became famous long ago working their own particular brand of magic around the gigs and festivals of the UK.
We embrace it because we yearn for those feelings of yesteryear. I saw a video on Twitter today of four men, in their fifties at least, two of them with their arms around each other, the other two staring into each other’s eyes, all united in bliss at Paul Weller belting out ‘That’s Entertainment’ in the pre-Blur warm-up.
They looked like they were having the time of their lives, but I guarantee they were also thinking about the first time they heard that song on vinyl, or heard Weller sing it live, or the memories it conjures up each time it’s played.
Dwelling in the past
In our own way, the mortgage market – and particularly borrowers – might be currently feeling a huge dose of nostalgia right now, a yearning for what has been and gone. Not the market of a few decades ago of course, but far closer in time – a couple of years perhaps, certainly pre-mini Budget.
Time waits for no mortgage adviser, or lender, or borrower, and I’m afraid that we can all stand around talking about what used to be the norm, or we can get on with trying to get the best outcomes for our clients in the here and now. After all, none of us is able to access the mortgage market of 2021, or any other time.
If any sector is acutely aware of the movement of time, and how quickly the ground can shift, it is perhaps the buy-to-let one. Landlord borrowers, and there are plenty of them I might add, will be particularly au fait with the changing nature of property investment, certainly over the last decade, and these most recent rate shifts put that difference into even sharper focus.
But, again, what can they do knowing full well what was taken away from them, and the direct impact this had on their ability to keep offering properties to the private rental sector (PRS) and stay invested?
Weighing up the options
Of course, they can sell up, and some are choosing to do this, picking out those unprofitable properties from their portfolios and bringing their overall level of mortgage debt on the portfolio down.
For those with smaller portfolios it’s less easy to cover for a property which isn’t performing, or which is going to cost double in terms of mortgage payments each month, when you can’t increase rent to a level to make it sustainable or indeed viable.
But, for many others, the adviser will still be required – perhaps more than ever. And as lenders, we can’t exist, or compete, or provide products and criteria in a market where swap rates were two or three percentage points lower, and subsequently where interest coverage ratios (ICRs) were less, because that’s not today’s market.
Tackling the situation at hand
However, what we can do is our best, and try to work out product options and solutions which allow landlord borrowers to clamber over that affordability hurdle, to stay invested, to keep making a profit, and lest we forget, to keep that property in the private rental sector.
That’s what we, and many lenders, have been doing.
Hence, you’ll have seen a growth in the number of lower rate/higher fee products, and why you’ll have seen a growth in specific green products with cheaper rates for A-C EPC level properties. We’ll continue to focus on ways we can support those borrowers who want to make those energy-efficiencies in order to keep the energy bills down for their tenants, and to make their properties as attractive as possible.
This is our reality, it’s the one facing advisers and their buy-to-let clients today, and it’s the one we have to work in, in order to find these landlord borrowers the product solutions that keep them offering property in the here and now.
It’s not what it once was, but then again nothing is.
