Had an email from the National Landlords Association today (my comments are in bold!) :
Landlords find it harder to get finance
NLA gives evidence to the Treasury Select Committee
Landlords in the UK are finding it harder to get mortgage finance. Bank of England interest rates may be historically low but accessing finance at these rates is easier said than done. With this as the economic backdrop, NLA was invited by the Treasury Select Committee to give evidence this week at an inquiry in Westminster.
The inquiry “Mortgage arrears and access to mortgage finance” sought evidence on a wide range of financial issues including the impact of the credit crunch on the availability of finance, the effectiveness of regulation and, crucially, the experiences of those seeking to refinance existing loans or obtain finance for new purchases.
We provided a substantial amount of written evidence in addition to the points raised at the inquiry on the day.
Key points raised by NLA:
- Lenders have substantially intensified their lending criteria and raised fees, making it harder for landlords to refinance existing loans and finance new acquisitions.
- Many lenders are restricting access to interest only mortgages, making buy-to-let less attractive as an investment opportunity.
- Mortgage valuations are being used by some mortgagees to force down property values, making sufficient loan to value mortgages more difficult to obtain.
- The number of buy-to-let mortgage products available in the market has fallen by 95% over the past two years.
- Niche lending is almost non-existent, meaning that landlords with properties such as HMOs are finding it increasingly difficult to obtain finance. UH OHHHHH THIS IS ME BUGGARED THEN, LOL
- 51% of landlords feel that their ability to generate a profit is under pressure and 27% have experienced rent arrears in the last 12 months ERRR NO-ONE I KNOW IS TRYING TO MAKE A PROFIT, EVERYONE’S JUST HAPPY TO KEEP ON TRADING!
It is not all bad news however, and we were able to demonstrate the resilience and strength of the private rented sector. In particular we impressed upon the Committee that landlords are generally far less exposed to the economic downturn than many other industries and were often in a better position to ride out the difficulties.
In fact recent research by NLA showed that:
- 36% of landlords own their portfolios outright with no reliance on mortgage finance LUCKY GITS
- Only 4% of landlords with mortgage finance have missed a payment in the last 12 months
- 25% of all landlords, and 61% of established portfolio landlords, are planning to buy more properties in the next 3 months YES, WELL THERE’S PLANNING, AND THERE’S ACTUALLY BUYING ISN’T THERE 🙂
- The average loan to value of all landlords reliant on mortgage finance is only 39%, demonstrating that there is still significant capital in the private rented sector. MOOT POINT THIS ONE, I RECKON, ALL DEPENDS ON THE DREADED VALUATIONS…..
As always the NLA were keen to ensure that the Committee understood the important part played by landlords as key consumers of mortgage finance and were presented with a comprehensive view of the challenges currently facing the sector.
The Treasury Select Committee is one of the most important House of Commons Committees and examines the expenditure, administration and policy of HM Treasury, HM Revenue & Customs and associated publics bodies including the Bank of England and the Financial Services Authority.
NLA Vice Chairman, John Socha, attended the Treasury Select Committee inquiry hearing on Tuesday 30 June 2009 and gave evidence on behalf of the NLA. The session can be watched in full on the Parliament website. END
But it’s ok, even having listened to all of the above, this bloody government is still more than likely going to bring out another swathe of costly and time consuming red tape and nonsense for landlords to wade through, pay for and detest; changes which inevitably won’t turn bad landlords into good ones, and will just mean the good ones struggle more to keep on top of all their commitments.
And they won’t make the banks do a single thing to rectify the above.
You can read the full article at: http://www.landlords.org.uk/archive/factsheets/factsheet-landlordsfindithardertogetfinance.asp
Or the NLA web-site : http://www.landlords.org.uk/index.htm
Oh, I can’t wait to re-finance some of my stuff once the Heritable (Icelandic bank and now in administration!) deal comes to an end, it’s totally niche lending. Godammit 😉
Great post!