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Landlords building ‘war chests’ to expand portfolios

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  • 29/06/2020
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Landlords building ‘war chests’ to expand portfolios
Remortgaging landlords are predominantly growing their cash reserves with a view to expanding their portfolio, research suggests.

 

Around 30 per cent of buy-to-let investors are building ‘war chests’, according to brokerage Mortgage for Business.

Almost half of landlords have increased the size of loan applications.

The long-term trend is for around only 38 per cent of investors to push up the loan amounts.

Steve Olejnik, managing director of Mortgages for Business (pictured), said: “The number one priority of active, professional landlords is to set themselves up with a war chest so they can look for growth.

“Smart landlords know that the time is coming to bag some bargains and start expanding portfolios.  Increasingly, that is where their remortgaging priorities lie.”

In the same period a year ago, the main concern of remortgaging landlords was to manage risk by moving onto a longer fixed rate mortgage and away from variable rate products.

Mortgages for Business’ research suggests this management of risk is now the third in the list of factors for remortgages.

Lowering monthly payments is now the second most important concern when remortgaging – it was the third in 2019.

Olejnik added: “12 months ago, in 2019, a lot of the landlords we worked with were looking to guard against risk.

“That’s shifting now as opportunities to purchase cheap properties presents themselves.  With properties prices poised to drop before the end of the year, the balance between risk and reward is shifting.  It will be interesting to see how landlords’ investment strategies adjust to changing tenant demand.”

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