Commercial opportunities and the BTL boom

Commercial opportunities and the BTL boom




.

With property becoming a hot topic for investors, Bridging & Commercial got a market analysis from Gary Bailey, Director at Lancashire Mortgage Corporation.

 

Property is becoming a hot topic for investors. With the combination of low interest rates and decreasing house prices, property is an attractive investment opportunity.

 

The current restrictive approach to lending from traditional sources is further fuelling the buy-to-let boom, as first time buyers are finding it harder to secure a mortgage, which, in turn, is driving the demand for rental.

 

The most recent statistics from the Residential Lettings Survey from the Royal Institution of Chartered Surveyors (RICS) indicates that new tenant demand outstripped supply of rental property throughout May, June and July of this year.

 

This backdrop is pushing up rental prices and making the current buy-to-let market a hotbed of opportunity for investors looking to build their property portfolio.

 

However, with traditional lenders still restricting lending, many investors are finding it more difficult to raise finance to take advantage of the current opportunities. This has stimulated growth for short-term finance solutions such as bridging loans, as well as Buy To Let secured loans, as investors seek to capitalise on the market opportunity.

 

Property investors need to raise finance quickly to take advantage of the lower house prices and higher rentals. Bridging finance and Buy To Let secured loans provide a quick, flexible lending option.

 

Previously, some brokers overlooked bridging products, as mortgages were freely available. Today, changes in the market have made these finance solutions an option that complements modern investor borrowing needs.

 

To capitalise on this growth area, brokers need to ensure they are offering a range of finance products to satisfy current property investor requirements.

 

Many lenders will now consider a range of residential and commercial property types as security, as well as a range of different income sources and credit profiles. This new approach has opened up the market and increased the potential finance solutions brokers can offer. 

 

In addition, specialist lenders have responded to market conditions and introduced new products that support property investors’ needs to develop their portfolio. For example, Lancashire Mortgage Corporation has launched their ‘Pre-approved Auction Plan’ for Buy to let that provides pre-approval and purchase valuation bypass, which mean no valuation is needed for properties less than £150k. These products will make approval much quicker and more accessible, allowing property investors to move faster.

 

Forging strong relationships with specialist lenders who understand the market and innovate to complement the need of modern borrowing will ensure brokers remain competitive.

 

This will not only put brokers in the best position to provide the right Buy to Let solution, but also allows brokers to forge relationships with a wider audience increasing potential revenue opportunities.

 

The current market has created an environment for change. Key solutions to Buy to Let lending are short-term funding (bridging Finance) and Buy To Let secured loans. Brokers need to consider these products, as viable options to remain competitive.

Leave a comment