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Buy-to-let Watch: Is consultation too much to ask?

The lettings industry has been the focus of intense scrutiny of late.

This can be taken one of two ways. On the one hand, it is evidence that the government is recognising the importance of the rental sector. Indeed, in the Housing White Paper, published last year, it was clear that renting was being given more attention than it previously had been in the political world.

Perhaps as a result of the ongoing housing crisis, the government seemed to be recognising that for many people, renting is the best and the only choice and is therefore turning its attention to making sure renters have a fair deal, as opposed to just encouraging everyone to try and buy.

On the other hand, increased scrutiny usually means more criticism and further regulation, and this is something we’re certainly seeing. The latest proposal from the government focuses on the length of tenancies, with calls for tenants to be given longer agreements to offer them more security.

This proposal clearly has its benefits. It’s important that tenants feel secure in a rental property. Landlords don’t want to have to be searching for new tenants every few months and a happy and content tenant is more likely to want to stay for the long term.

With more landlords seeking long-term fixed rates at the moment in order to give themselves more security amid a changing landscape, surely it’s only fair that tenants are afforded that same sense of certainty.

There are, however, some concerns surrounding this, in particular when it comes to financing a property. Many lenders will not allow lengthy tenancies because it is thought to be too risky if a repossession has to take place. Understandably then landlords are concerned. And, once again, politicians are proposing changes without actually speaking to those operating on the frontline about the practicalities.

In order for these proposals to work, lenders will need to respond accordingly. I don’t doubt this will happen – indeed, we’ve seen lenders work hard over the last few years to facilitate landlords amidst all of the changes imposed upon both the buy-to-let sector and the lending industry. We’ve seen rates plummet in order to make things easier for landlords, we’ve seen criteria changes to allow more top-slicing. And I believe we’ll see lenders revise their rules to allow landlords the option of offering a longer tenancy to those tenants who desire one.

Going forward, however, it would be nice if we could be consulted on at least one of these proposals before they are pushed out. Wishful thinking? Perhaps.

Buy-to-let Rates

Rate  MAX LTV %  Description  Arrangement Fee  Rent Cover  ERC 
1.44%  60% 

Virgin Money 

2 year fixed 

£1m max. loan 

£1,995 

£500 cash back 

145% @ 5.5% 

1.5% in Yr 1 

1.5% in Yr 2 

1.69%  70% 

Leeds Building Society 

2 year fixed 

£500k max. loan 

£1,999 

Free valuation 

140% @ 5.5% 

3% in Yr 1 

2% in Yr 2 

1.79%  75% 

Godiva 

2 year fixed 

£1m max. loan 

£1,999 

Free valuation 

140% @ 5.5% 

2% in Yr 1 

1% in Yr 2 

2.09%  60% 

NatWest 

5 year fixed 

£2m max. loan 

£995  135% @ 5.5% 

5% in Yr 1 

4% in Yr 2 

3% in Yr 3 

2% in Yr 4 

1% in Yr 5 

2.54%  75% 

Santander 

EXCLUSIVE RATE 

5 year fixed 

£750k max. loan 

£1,999 

Free valuation Free legals or £250 cashback on remortgages 

130% @ 4.5% 

5% in Yr 1 

5% in Yr 2 

5% in Yr 3 

5% in Yr 4 

5% in Yr 5 

*Rates correct as of July ’18

Ying Tan is managing director of Buy to Let Club

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