Increased cost and regulation have lessened the appeal of traditional BTL in favour of alternative types of investment, such as holiday lets, HMOs and refurbishment. At the same time, a flat property market and uninspiring house price inflation leave little to excite short-term speculators.
The definitive result of the general election may prove to be a shot in the arm for the property sector, but even factoring in a Conservative majority government, Savills has forecast national house price growth over the next five years to be just over 15%.
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There remains significant opportunity for those investors who are prepared to adapt their approach to the changing market, and, at the moment, those opportunities appear to be for alternative types of property investment for landlords who are prepared to take a longer-term view.
At Castle Trust, we have seen increasing demand from property investors for loans that can deliver the flexibility and lending appetite of traditional bridging, but with longer terms that can provide them with peace of mind. The market is shifting and, as lenders, we need to adapt to provide the products that best fit the requirements of clients.
This is why we have launched TermTen, a 10-year term loan that is fixed for five years, after which time customers are able to refinance penalty-free. This might be an unusual concept for some brokers, but it is one borne out of customer requirement, and the longer term enables rates to be competitive. We believe that this approach will prove popular among borrowers and be adopted by more lenders that realise a moving industry requires a different type of product.