Going back to BTL basics in the future – The Buy to Let Broker

by: Matt Hardman, director of the national mortgage specialist, The Buy to Let Broker
  • 09/01/2020
  • 0
Going back to BTL basics in the future – The Buy to Let Broker
Even if you’d owned a flux capacitor DeLorean just four years ago with the intention to peek into the future, it would have been tough to convince people of the realities of the last few years. 

Who would have believed the vote to leave the EU, let alone May’s years of dithering and lack of negotiating skills or her now-infamous robotic dance moves, politicians’ dearth of respect for the democratic foundation of our green and pleasant land – and that Boris would be the unlikely saviour in all of this, with a landslide December election victory and a Brexit deal passed. 

Love him or hate him, I think the outlook is far better than it was six months ago and Mr Johnson’s bluff and bluster looks set to bring us (at least some of) the certainty we all crave. 

But now it’s January 2020, and we’re back to predicting the future. What do we think we can expect this year in the buyto-let market given the UK’s recent past? What does the year hold, what external influences will help or hinder the market for landlords? 

Sadly there is no crystal ball or plutonium-powered wheels, but I don’t think we’re pushing any envelopes to say that the entrepreneurial, agile landlords we’ve seen a lot of in the past will be heavily active this year and I dare say a number of less active landlords who have been sitting on their hands, will now have to release the purse strings. 

I believe landlords will continue to take professional tax advice and decide the best route given the harsh environment for personal mortgage gearing and as ever lenders will be battling for a healthy share of the market, both in rate and criteria – hopefully, a little more aggressively. 

We may see one or two entrants from the vanilla side of the buy to let market dip their toe into the limited company lending market, albeit it on a small scale with fairly constrained criteria to start. 

The HMO side of the market will continue to be strong, from two standpoints, landlords are always looking for extra yield and margin – and secondly, from a tenants’ perspective there is less rental stock available and in an effort for single people to keep costs realistic, HMO living is more popular and in better shape than ever before. 

Where there is confidence, albeit it green shoots, we’ll usually see house price increases and I think it’s fair to say we’ll see some small but steady growth this year of around 2-4 per cent in terms of house prices. 

As we launch into 2020; the glass is more half full than it’s been in recent memory, but any business relying on outside influences is sure to falter. That being said, I strongly believe that the foundations of any great business remain consistent in any firm regardless of outside influences.  

So, whether you are a broker or a landlord or even a conveyancer or lender, the only choice you have is whether you wish to outperform the market or not, and shape your own business and your own future. 

Therefore my humble advice is simply this; collaborate, build relationships and work as hard as you can to meet the goals of your clients. High service levels must remain, managing expectations is paramount, go the extra mile and do whatever you need to do to keep your clients or tenants happy. 

Great Scott, if my calculations are correct, the ‘20s will be less ‘Back to the future’ and more ‘Back to basics’.” 

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