Merrett said: “The death of the dinner party landlord has been over exaggerated. There are a lot of people who aren’t holding onto properties for yield or capital appreciation but holding on because they want to keep the asset, even if they’re topping up each month. They want to be able to retain that asset to pass on to family long term. The challenge is how children are going to get onto the property ladder in the future.”
He added: “What’s really changed is the thought process behind it [investing]. What am I in this for?”
He continued that opportunities remain for professional landlords keen to be acquisitive in this market, given the ‘subdued sentiment’ but many continue to struggle with squeezed loan to values (LTVs).
Rachel Geddes, managing director, Global Mortgage Management, said: “At the moment, it doesn’t feel very positive, because until next year when we see how tax is being impacted with the higher rates, the profiteering market, we don’t know where it is. With LTVs being squeezed left right and centre, we are seeing 40-50 per cent deposits needed every single time.
“Lenders have had to alter their stress testing calculations, but it’s making some pockets of the market impossible to get a mortgage on for a buy to let. That’s unfortunate because tenants are still there. We need landlords there, so we either need to see something on affordability or something on the rates.”
Jeremy Duncombe, MD at Accord Mortgages, said: “What we’ve seen is the importance of the private rental sector (PRS) at the moment. It’s a sector we all really need to get behind because our latest research shows how much it supports tenants, like single parents, or people on housing benefits with children. It’s fundamentally important.
“The second question is what can lenders do? We’ve seen a real uptake in our top-slicing feature in particular, which has come into its own. And this landlord interest is moving further and further north as investments become more and more unaffordable in the south and south east.”
Watch out for the next three parts of our video debates, in association with Accord Mortgages, tackling first-time buyers, affordability and the market outlook for next year.
Note: Since the recording of this video, Richard Merrett, director of strategic relationships at Simplybiz confirmed a move on 2 January to become managing director of Alexander Hall.
