View more on these topics

Buy-to-let watch

The sector is picking up at great speed and now is the time for would-be landlords, with let-to-buy also increasing in popularity


Well, the summer is drawing to a close and what a summer it’s been. Aside from the great weather we’ve experienced, we’ve also benefited from some fantastic figures – both as a company and the industry as a whole. And if the general consensus is to be believed the growth we are all experiencing is likely to be sustainable as opposed to a mere blip.

As the market has improved one particular trend has come to light, that is that more and more homeowners are choosing to enter the landlord arena by using Let to Buy.

Let to Buy is often thought of as a product for those homeowners who cannot sell their home (as a result of the economic climate over the last few years) and so instead choose to keep it and rent it out. In short, it is thought of as a product used as a necessity, rather than through choice, for the so-called ‘reluctant or accidental landlords’.

However, as the buy-to-let market has improved a large number of homeowners are seeing the benefits of retaining a property and renting it out to tenants. With the sector picking up at great speed now is the time for would-be landlords to make the move into buy-to-let and start building a property portfolio.

If a property no longer suits the needs of the homeowner and they have accumulated enough savings to put a deposit down on a more suitable home, Let to Buy allows them to turn their current home into a rental property which should, in time, provide a valuable income and capital growth opportunities.

It’s an interesting product and one which most lenders allow – with the exception of Godiva.

One thing we, as brokers, must be careful of is that we’re not facilitating a back door residential. A small number of homeowners may look to switch to a Let to Buy product but continue living in the property, under the pretence of renting it out.

A number of lenders have tightened up on this sort of activity by requiring proof of onward purchase and, rightly so, as this is a sure fire way of ensuring the buyer is using Let to Buy correctly. Of course, this does not work in all instances – there are some genuine cases whereby the homeowner can’t sell the property and decides to revert to a Let to Buy product and move back home with their parents, for example.

As long as lenders and brokers are vigilant and thorough when assessing a customer, the risk of back-door residential should be avoided and Let to Buy will continue to increase in popularity.




Affordability checks will not hit successful applications, say lenders

Almost three-quarters of intermediary mortgage lenders are confident the new affordability checks coming in as part of the Mortgage Market Review will not significantly reduce the number of people who successfully apply for a mortgage. Research from the Intermediary Mortgage Lenders Association, published last week, found just 7 per cent of intermediary lenders expect significantly […]

AMI welcomes Govt’s rebate and discount for interim consumer credit licence charges

The Association of Mortgage Intermediaries has welcomed the Government’s decision to launch a programme of rebates for advisers who are hit by new interim consumer credit licence charges. A paper released by the Financial Conduct Authority last week also confirmed a 30 per cent discount for all sole traders and firms who apply for an […]


Employer iPMI responsibilities could continue to escalate, says Jelf

New laws in Dubai will put the burden of providing international private medical insurance (iPMI) firmly on the shoulders of the employer in order to maintain the country’s leading healthcare facilities. With 10,000 UK nationals having moved to the country since 2007 and only 16.5 per cent of the total 8.2 million people living there being Emiratis, Jelf Employee Benefits believes this move was inevitable and employer responsibilities could continue to escalate in future.


News and expert analysis straight to your inbox

Sign up