Expats, bridging and experienced landlords likely to dominate BTL market in H2 2019 – Commercial Trust

  • 11/06/2019
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Expats, bridging and experienced landlords likely to dominate BTL market in H2 2019 – Commercial Trust
More experienced landlords with existing portfolios will dominate the buy-to-let (BTL) sector in the second half of 2019, according to predictions.


Andrew Turner, chief executive of Commercial Trust Limited (pictured), believes that landlords with larger portfolios and more equity are better placed to make additional purchases and suggests they may snap up properties sold by anyone leaving the sector.

The changes that have taken place over the past three years have had an impact on landlords with smaller portfolios of one or two rental properties, he added.


Expat buy to let

As a result of Brexit, a depreciating pound has played to the favour of expats looking to invest in UK rental property.

Turner said there has been an increase in the number of lenders in the BTL expat market over the last year.

However, he clarified that with most lenders the applicant must be a UK citizen, needing to be an experienced landlord and able to provide a proof of income.

While the number of lenders offering expat BTL mortgages has increased, it remains a limited market and interest rates are usually higher.

In most cases, Turner said the lender will expect an expat to have at least 30 per cent of the property value as deposit.


Bridging and development growth

Turner also questioned if bridging and alternative financing would grow as homeowners stay put and instead choose to further develop properties in the hope of improving living conditions and perhaps adding capital growth.

“New planning application rules in England, are also encouraging people to extend properties. Property owners will no longer need a full planning application to extend a home,” he said.

“At the same time, permitted development rights will afford business owners greater flexibility when it comes to converting properties on the high street.

“Landlords who own shops will be able to convert these to office spaces without having to apply for full planning application.

“These legislative changes could serve as a catalyst for more people to look at conversions, potentially increasing demand for bridging loan finance and commercial or semi-commercial mortgage financing,” Turner added.


Rise in large portfolio landlords

Specialist lender Paragon reported an increase in the number of landlords with large portfolios, applying for BTL lending in the first half of 2019.

The lender found that 88 per cent of its total BTL business came from landlords using limited companies operating large portfolios, an increase of 16 per cent year on year.

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