Although a number of lenders temporarily withdrew from the market during the first lockdown and visual inspections ground to a halt, the market has recovered well.
The total amount of buy-to-let lending annually has been around £36bn for the last couple of years and we may see growth up to £40bn in 2021.
There is certainly a strong appetite from lenders in the buy-to-let space providing a wide range of products for landlords to choose from.
This has created healthy competition in the marketplace and the historically low Bank of England base rate has meant some very attractive rates are currently available.
Buy-to-let investors have a diverse range of finance needs and lending policies in the marketplace differ widely, with no two providers taking exactly the same approach to risk and criteria requirements.
For complex buy-to-let cases such as for homes in multiple occupancy (HMOs), limited companies, large portfolios or semi-commercial properties, landlord clients may find that they need to choose a specialist lender such as Paragon, Foundation Home Loans or Interbay.
There is no shortage of choice for complex cases and brokers should be able to find solutions for almost all scenarios.
However, the buy-to-let mortgage market is very dynamic, and a high level of expertise and technical knowledge is often required to place these cases successfully and keep on top of all the options available.
The demand for limited company finance is still strong which is unsurprising as the mortgage interest tax relief for buy-to-let was finally phased out completely in April 2020.
Landlords may benefit from tax advantages by using a corporate structure and high demand for limited company products is likely to continue in 2021.
A recent report by Hamptons claimed that around half of all buy-to-let properties are held in a limited company.
The holiday let sector has seen an unexpected boost in demand for properties with popular resorts and other attractive locations as a growing number of people have opted for UK staycations during the pandemic.
At TBMC we have seen a significant uplift in holiday-let enquiries and several lenders have widened their propositions to cater for this niche area of the buy-to-let market.
However, product options are still limited, and the sector may benefit from greater competition, especially as demand for UK holidays is likely to continue throughout 2021 and perhaps further into the future as people discover what Britain has to offer.
The buy-to-let mortgage market is still buoyant and there is reason to be optimistic about writing buy-to-let mortgage business in 2021.