Discussions about how to recruit young talent in the industry, how to talk about inflation with clients and how to explain swap rate volatility also garnered interest from readers.

The blocking of Dye and Durham’s buyout by the TM Group also climbed up into the Top 10, along with insights from AMI’s chief executive, Robert Sinclair around consumer duty.

FCA gains ability to strike off firms within a month that don’t use regulatory permissions

Preparing landlords for EPC changes will be key to advice process – Cox

Degrees don’t matter anymore in the hunt for young talent – Marketwatch

Inflation becoming ‘hot topic’ for brokers in client discussions ‒ analysis

The lowdown on swap rates – explainer

Property firms issued with substantial money laundering fines

Dye and Durham’s buyout of TM Group blocked to avoid higher homebuyer fees

House prices grow by £24,000 in a year – ONS

BSLS2022: Consumer duty ‘much more significant’ for specialist lending sector

Aldermore’s intermediary distribution head Nick Parker to depart

This is driven by a number of factors, such as the growth of both single person households and the wider population, limited supply of social housing and an increase in the gap between average house prices and salaries.

Although various schemes have existed to increase homeownership, the first rung of the property ladder remains a step too far for some – purchase prices have swelled at the sharpest rate in over a decade to reach record levels.

Large-scale build-to-rent (BTR) developments have been touted as a threat to private landlords’ livelihoods, but up to this point have targeted a relatively small section of the rental market through largely upscale city centre offerings.

Recent analysis by Knight Frank highlights how this is set to change with billions of pounds worth of funding earmarked to see BTR move into suburban areas to target families.

It is estimated that the UK will need 1.8 million new households over next decade however, so I feel the important place of private landlords will remain.

Most landlords have good tenant relationships

Not everyone agrees it seems, and instead of viewing landlords as part of the solution to the UK’s housing shortage, they are often seen as greedy property barons who profit from letting low quality homes to those who have no choice but to endure the conditions.

In our new Landlord Report 2022 we combined our understanding of Paragon landlord customers with third party insight to come to a contrary conclusion.

Countering the negative perceptions of landlords that are often perpetuated in the media, we see that the majority of landlords enjoy harmonious relationships with their tenants who tell us they are content with their privately rented home. Of course, issues do arise but are often resolved through a pragmatic approach to problem solving.

Unfortunately, accommodating tenant requests to keep a cat or make up a missed rent payment does little to overcome what landlords have long seen as their main challenge – government policy that makes letting property more work for less reward.

Analysis of data has suggested that a shift away from tenure neural housing policy has ultimately caused some landlords to exit the sector. For example, Zoopla figures for the proportion of properties listed for sale that were previously rented have quadrupled since Q1 2018, highlighting an upward trajectory that is getting steeper.

While we don’t know if these properties remain in the private rented sector – are amateur landlords capitalising on the current high house prices by selling to professionals? – or if homes move into other tenures, there is lots of anecdotal evidence of landlords calling time on their lettings businesses.

EPC requirements opportunity for brokers to proactively support landlords

One of the most pressing regulatory changes set to impact landlords is the proposed amendment to EPC requirements, something I see as an example of how the sector can take a proactive part in supporting landlords.

In addition to working with the government, making them aware of the scale of the issue and the implications of the policy, lenders can provide products that make it possible for landlords to make the necessary adjustments to their portfolios.

This is something we’re currently working on, and with a new problem requiring innovative solutions, brokers can play an important part in helping their landlord customers stay up to date on any changes and find the finance needed to ensure they comply.

For new Natwest customers, rates rose by as much as 15 basis point (bps) while mortgage for existing customers saw increases of around nine bps.

Meanwhile, TMW is cutting buy-to-let products rates down by up to 0.55 per cent for some of its limited company borrowers.

Natwest

Natwest has made its second set of changes to both new and existing product ranges in the space of a week.

Rates on two and five-year fixed rate categories are almost identical on most like-for-like products, with less than five bps difference between them.

This round has seen residential rates go up by 15bps across the core range to average out at around 2.9 per cent, with the exception of the five-year fixed remortgage at 90 per cent loan to value (LTV) product, which went up by 0.05 per cent to 3.04 per cent.

First-time buyers are also taking a 15bps hit on higher LTV ranges on 85-90 per cent products with £1,000 cashback.

New green mortgages and remortgages at 60 to 85 per cent LTV with a £995 fee are all going up by 15bps too.

The 95 per cent LTV mortgage guarantee residential product rates are also up 15bps. These have no fee and £750 cashback, with a rate of 3.44 per cent for a five-year fixed, and 3.42 per cent on a two-year fixed.

Existing customers are seeing a bit of a better deal – rates for core range switchers are going up between seven and 15bps, with or without the £995 fee for two-year fixed products.

There’s been a nine to 14bps hike five-year switchers at 60 per cent LTV, including products for high value borrowers. The five-year fixed 75 to 85 per cent ranges are going up by around 13bps.

One of the smaller increases have been made to the 80 per cent LTV option with a £995, as this has increased by six bps to 2.6 per cent. The 90 per cent LTV alternative with a fee has risen by five bps to 2.89 per cent, while the fee-free option has increased by 20bps to 3.25 per cent.

TMW

TMW has reduced selected limited company buy-to-let rates by up to 0.55 per cent.

The five-year fixed rates at 75 per cent (LTV) are available for purchase and remortgage, and include a 3.19 per cent rate with a £1,995 fee; a 3.24 per cent rate with a £995 fee; and a 3.47 per cent rate with no fee.

Following the recent base rate rise to one per cent, tracker rates will also be increasing by 0.25 per cent.

Daniel Clinton, head of TMW, said: “These latest changes see us making reductions to our range of limited company mortgages, which is an important and growing segment of the market. Many landlords are increasingly choosing to expand their portfolio in this way following the changes to tax relief on individual ownership.”

Launched in 2018, Lendco is an intermediary-only specialist mortgage lender that provides non-regulated buy-to-let. It has completed nearly £1bn in total loan originations to date.

The maximum loan size for 75 per cent loan to value (LTV) products is £2m, and the maximum loan size per asset is £4m, and £10m per borrower.

Lendco’s mortgage for houses in multiple occupancy (HMO) allow up to eight letting rooms and consider multi-unit leaseholds as well as local authority or housing association tenancies. If a landlord’s rental income doesn’t meet the affordability requirements, surplus earned income can also be used to cover any rental shortfall.

The lender also offers portfolio mortgages, and accepts applications from ex-pats and foreign nationals, including registered borrowers in the Channel Islands, the Isle of Man and Gibraltar.

Danny Belton (pictured), head of lender relationships at L&G Mortgage Club said: “We are pleased to be offering this buy-to-let specialist solution to the broker network.

“With landlords buying more homes than they are selling for the first time since 2016, it is imperative that the market offers landlords competitive and flexible solutions. This range allows brokers to support landlords with complex borrowing requirements, at a time where finances may seem stretched and house prices are surging.

“I have every confidence that this will be a welcomed addition by our adviser community, who can now help their customers benefit from manually underwritten transactions by Lendco’s credit team.”

Simon Knight, managing director at Lendco, said: “Joining Legal and General Mortgage Club is the next logical step in our growth plans. It allows Lendco to upscale its operations by adding a household name to our distribution network, without impacting relationships with our select panel of brokers or compromising on the service we offer them.”

To qualify for a licence, landlords must provide proof that they are up to spec with safety and management standards, and are a “fit and proper person”.

Under the Housing Act of 2004, local authorities currently have powers to introduce selective licensing of privately rented homes to address problems in their area, or any part of them, caused by low housing demand and/or significant anti-social behaviour.

Selective licensing applies to properties that are let to one or two people, or one family households. Where there are multiple rented flats in the same block or building that are owned and managed by the same person, the building may qualify for a single selective license.

Oxford’s five-year licence will cost private landlords £480, with £80 off for those who apply within the first three months, and a discounted fee of £280 for accredited landlords. This applies to anyone letting their property.

Similar selective licensing schemes are also set to come into force this year in Liverpool and Milton Keynes.

Councils are taking the wrong approach

The National Residential Landlords Association (NRLA) is against the initiative.

It argues that councils like Oxford City Council are taking an ineffective route by licensing all landlords at a cost instead of using the data available to take direct enforcement action against bad actors.

A spokesperson for the NRLA said: “All our research shows there is no clear link between licensing schemes and improved enforcement against criminal and rogue landlords. Too often such schemes penalise responsible landlords who will come forward to be identified, whilst failing to find those operating under the radar.

“Oxford, like all other councils, should focus instead on better using the wide array of data already available to identify landlords and take action against those bringing the sector into disrepute. This includes council tax and housing benefit data along with information held by the Land Registry.”

Clamp down on Oxford’s rogue landlords

According to the Oxford Mail, 49.3 per cent of Oxford homes are privately rented. Of the estimated 30,500 homes rented out, 6,200 could have a serious housing hazard, according to an independent review conducted in 2020.

Imogen Thomas, the city council’s private sector tenants’ champion, said: “That means that conditions will be improved, tenants will be safer, and law-abiding landlords need not fear being undercut by the cowboys.

“Tenants in the private rented sector are all too often left at the mercy of a system that it is weighted against them.”

Analysis of the government’s local housing statistics by Octane Capital found that on an annual basis the number of HMOs in England dropped three per cent year-on-year in 2020/21 to 497,884. The situation was more pronounced in the capital, where the number of HMOs declined by 13 per cent, the largest drop in any region.

The report noted that 11 boroughs in London had reported decreases, with the largest falls recorded in Ealing at 59 per cent and Lambeth with a 58 per cent decline.

Octane Capital suggested that this drop in HMOs across the county may be down to HMO rule changes from 2018 taking hold. This was when rules requiring a licence for all HMOs occupied by five or more people were introduced. Additionally, in order to obtain a licence, all rooms within the HMO would have to meet a minimum size criteria, with limits on how many people over the age of 10 who could live there.

Jonathan Samuels (pictured), chief executive of Octane Capital, said that the HMO licensing rules rightly looked to boost the standard of housing, but this had resulted in a decline in the number of operational HMOs across the market, particularly in London.

He continued: “We’ve continued to fund a high number of quality HMO deals throughout the pandemic and this sustained level of interest from professional investors is yet to show any signs of decline. This includes a large number of refurbishment transactions whereby investors are looking to drastically improve the quality of existing HMOs, so while volume has certainly fallen, we don’t believe this will be a long term trend and should benefit the nation’s tenants in the long run.”

The lender says that a customer on a £250,000 mortgage could save up to £1,500 on their arrangement fee with this change.

For new mortgages on properties where the EPC rating improves to at least a ‘C’ during the mortgage term, customers can apply for a partial refund of their arrangement fee, plus the cost of the new certificate up to £100.

Those with lower ratings can use Shawbrook’s unregulated bridging products to improve energy efficiency before transitioning to a buy-to-let mortgage and get the discount.

The lender has made the move ahead of current proposals from the UK government, which should require rental properties to have a rating of C or above, starting with all new tenancies from 2025 then all tenancies from 2028.

The median EPC rating for a residential property in England and Wales is currently a D, with properties only required to be above an E to be let.

Research conducted by Shawbrook as part of its Confronting the EPC Challenge whitepaper, earlier in the year, found that close to a quarter, 23 per cent, of landlords said their properties are currently rated D or below for energy efficiency.

In terms of income, landlords believed they could lose up to £9,500 a year in missed rental payments if they are unable to make changes ahead of the 2025 deadline. Landlords are currently expecting the improvements to cost in the region of £5,900 on average.

Emma Cox (pictured), managing director of real estate at Shawbrook, said: “We are committed to helping landlords and to a greener future. This product enhancement incentivises landlords and rewards customers with a high energy efficiency rated property.

“By being proactive, landlords will be in a strong position and one step ahead of the upcoming changes.

“From our research we have been able to understand how significant these policy changes could be for the market. We’ve listened to landlords and brokers to identify what is needed and where we can make a difference. This enhancement is the first in a long line of developments and innovations we will be making to support landlords.”

According to The Property Master’s BTL mortgage tracker, which collates data from 30 lenders that account for three quarters of the BTL mortgage lending, the cheapest BTL two-year fixed rate for a £160,000 loan at 60 per cent loan to value (LTV) has gone from 2.36 per cent to 2.46 per cent.

This has heightened average monthly costs from £251 to £265 per month once fees are included.

A BTL five-year fixed rate at the same loan and LTV has gone up from 2.48 per cent to 2.58 per cent, meaning monthly payments have risen from £346 per month to £359 per month.

Angus Stewart, chief executive of Property Master, said the “relentless climb” in BTL mortgage pricing predated the Bank of England’s decision to increase the base rate to one per cent.

He said: “The current turbulence in the money markets is also making it more difficult for some lenders to raise funds so there is a fear that as well as higher mortgage costs landlords may also face reduced choice.

“We are recommending to our clients that if they need to remortgage or are planning a new purchase, they should bear in mind mortgage rates are changing and products are being withdrawn on a more or less daily basis.”

Stewart added that whilst BTL mortgage prices looked low from a historical perspective the increase in prices came at a “very bad time”.

“Increased taxes and regulation have already chipped away in recent years on the returns landlords can hope to make. Now increased borrowing costs are making margins slimmer, [and this is] still exacerbated by the government removing mortgage interest relief which had less impact when the base rate was lower,” he explained.

“With accommodation in short supply and rents on the rise it will be worrying to see landlords deciding that the private rented sector is no longer for them.”

The products, for both individual borrowers and limited companies, are to help existing customers secure further lending to improve the energy efficiency of their rental properties.

The mortgages are available for loans of between £2,500 and £39,999, with the requirement that at least 50 per cent of the funds will be used for environmentally friendly improvements to the property. This may include a cavity wall insulation, solar panel installation, or the fitting of an air source heat pump. There are no arrangement or booking fees, and overpayments are permitted on both products.

The most recent draft deadline for new rental properties to reach an EPC rating of at least a C is set to be extended from 30 April 2025 to 31 December 2025, with a further extension to 2026 expected. However, time is becoming a serious factor for landlords looking to not be penalised as the currently proposed 2025 and 2028 deadlines for existing and new and tenancies loom.

Roger Knight (pictured), lending manager at Newbury BS, said: “We are keen to help our borrowers improve the energy efficiency of their let properties and are here to help ease this transition.”

Following the rate rise, the likes of Natwest, Santander, Leeds BS, Clydesdale and Skipton to make changes to their products and rates, with more changes expected to come.

In other news, brokers posited that increasing down valuations are being driven by high demand along with buyer desperation and MPowered Mortgages launched an AI system which aims to take on the big banks. A revival of Right to Buy also hit the headlines and brokers comments around upcoming EPC legislation piqued reader interest.

Base rate rises to one per cent

Shortage of property and desperate buyers behind ‘down valuations’ ‒ analysis

Natwest ups rates; Santander and Skipton increase SVRs – round-up

Inability to meet EPC deadlines could hit landlord property disposals – Marketwatch

Exclusive: MPowered enlists AI to produce complex residential underwriting in seconds

Rocketing inflation will induce steeper base rate rises – Maddox

Government to relaunch Right to Buy ‒ reports

Leeds BS cuts BTL stress rate by one per cent

Millions of homes pushed into higher stamp duty bracket

Exclusive: Cashback service MyMortgageRewards.com goes live to brokers