Landlords are not a homogenous group of people and their investment property choices and portfolios are diverse. At TBMC we get a wide range of enquiries and there are many niche areas of buy-to-let lending that are of interest to our clients.
Holiday let investments
Holiday lets have become a popular choice for landlord clients in recent years. A rising increase in Brits holidaying at home in the UK has generated the rental demand and increased mortgage options are now available for those looking for a unique investment opportunity.
Sourcing holiday let mortgages is slightly different from regular buy-to-let and there are certain points to check with your clients at the outset:
- Parks and covenants – some holiday let properties have restrictions on how they can be used and let too which may affect the number of lenders to choose from.
- Location – most lenders will expect the property to be in a prime holiday destination for example Cornwall, Devon and Brighton.
- Rental coverage – some lenders will need a local Holiday Letting Agent letter to confirm anticipated rent in low, medium and high season. An average of these will then be used in the calculation.
- AirBnB – TBMC works with a number of lenders that offer finance on holiday let advertised and run as a AirBnB. Further location restrictions may apply to these properties and those using elements of ‘serviced accomodation’, which is common amongst AirBnBs, should also be checked with the potential lender.
This is an area of buy-to-let finance that seems to be gaining interest, with several specialist lenders recently extending their propositions to include options for holiday lets.
We frequently get enquiries about ex-council properties at TBMC, which can be an attractive investment proposal for some landlords. There is a good selection of lenders offering lending on ex-council houses without too many caveats, however most lenders on our panel are more prescriptive when it comes to ex-council flats.
Specific lending criteria for ex-council flats includes limitations on the maximum number of storeys in a block of flats e.g. Barclays has a maximum of 7, Shawbrook has a maximum of 10 and Aldermore will only accept up to 4.
Certain lenders will offer lower loan-to-value products for ex-council flats and others require that the block has a certain percentage of private owner-occupiers e.g.both State Bank of India and Landbay require 50 per cent to be privately owned.
Some lenders prefer not to lend on flats with deck access and other lenders may impose more restrictive minimum property values for ex-council properties, such as Kensington with a minimum value of £200,000.
Although sourcing mortgages for niche buy-to-let requirements can be quite specialised with more limited options, these cases can be quite straightforward to place if you apply the right knowledge of lending criteria and the determination to pursue a solution for your buy-to-let clients.