Speaking at the Manchester Mortgage Business Expo, James Chidgey, senior manager, corporate accounts, at Nationwide for Intermediaries, said that brokers should “urgently” talk to their letting agent contacts to access such customers.
He said that, compared to a cash landlord with one property, a geared landlord taking on several properties with the same initial investment was much more able to spread their rental voids, regional risks and tax liabilities.
Chidgey told Manchester delegates that in the North West, which has the highest returns outside of London, a cash investor sees a return over five years of 8.9%. Over the same period, a geared investor sees a return of 21.6%.
He said: “Lettings agents and lenders don’t talk to each other and we realised that cash buyers are not being advised properly. Nationwide has been very successful in going out and talking to letting agents, and I would advise brokers with letting agent links to talk to them urgently.”
Chidgey continued that buy to let is one of the most positive parts of the industry, making up 12% of the mortgage market and becoming increasingly high profile.
In addition, he noted that 15% of The Mortgage Works’ business is now written at 80% LTV.
Chidgey said: “The future of the private rental sector is fantastic. It is going up all the time; private rental sector households have risen 62% in the last ten years to 3.4m.
“We reached a peak in 2007 when owner/occupiers reached over 70% and it will fall back to around 60%. The young have very different views on things.
“The future is good for landlords.”
