The buy-to-let boom shows no sign of abating with the first half of this year showing 75,100 buy-to-let mortgages worth £7.7bn advanced.
By 2020 it is estimated that the average house price will nearly double from £161,665 to over £300,000. Meanwhile, it is expected that the UK population will increase by six million in the next 25 years. It's highly unlikely that house building will be able to keep pace with demand and rental demand is likely to double in the next 10 years.
But buy-to-let can be perilous. Specialist website www.buy-to-let-secrets.co.uk warns that many quick-fix investors are choosing the wrong properties, the wrong finance, buying too many and managing them badly.
So with the relaunch last week of Bond 2 Let,which gives landlords a guaranteed income whether tenants default, damage or suddenly vacate the property, Mortgage Strategy asks – would you recommend this product and what precautions you would advise your landlord clients to take?
Kevin Duffy, director, Hamptons International Mortgages
“It's a creative scheme but I do have my doubts as to whether it would appeal to the typical buy-to-let investor.”
Mark Alexander, managing director, The Money Centre
“While the concept of Bond 2 Let is certainly innovative it might perhaps be too innovative. We wouldn't offer it as a product.”
Peter Brodnicki, director, Mortgage Advice Bureau
“It sounds likea more protected proposition which is probably a sensible idea. It's certainly going down the route of responsible lending.”
David Hollingworth, mortgage expert, London & Country
“The more choice there is, the better. It's certainly going to be good for the amateur landlord who is uncertain about taking that first step into investment property.”
Simon Chalk, director, Mortgage Portfolio Services
“I suppose if you had someone who was reliant on the income it would be effective – as important for the small landlord as ASU is for the private owner.”
Claire Allen, director, Talk Money
“In principle it sounds pretty good. I could definitely see this scheme working for individual investors.”
Paul Hedge, partner, Christie Scott's
“This sort of property bond I would have thought would be quite attractive to buy-to-let owners, especially if you can guarantee income.”
Simon Bucknell, head of business development, Chelsea Mortgage Management
“It sounds interesting but I'm not sure if it will capture the imagination of the buy-to-let market. We would normally recommend our clients hold the equivalent of six months' mortgage payments on deposit to cover unforeseens.”
Kevin Paterson, managing director, Park Row Independent Mortgages
“In principle it sounds good but it depends on cost. It sounds more comprehensive than a landlord's policy and I think they would go for it if it was competitively priced.”
Roy New, sole broker
“As a possible safeguard for landlords that we can run along with mortgage deals, it sounds like an excellent idea.”