opportunity knocks in specialist buy to...

Charles McDowell

Commercial Director, Mortgages

@CharlesRAMcD

Opportunity knocks

in specialist

buy to let

Agenda

• Specialist buy-to-let market overview

• Challenges

• Good news

• But why is it so complex?

• Broker opportunity

• Questions

Buy-to-let market

Net investments down 80%

Driven by less people getting into

Buy to let as a pension strategy.

Some predict mortgage market to hit £38bn

Still a buoyant market, driven by

specialist buy-to-let and portfolio

landlords.

Sentiment remains strong

Two fifths of landlords thought

the size of the market will increase over the

next 12 months. (Down from over half this

time last year)

Sources: Intermediary Mortgage Lenders Association (IMLA) 2018 | Council of Mortgage Lenders (CML) market forecast | Aldermore and Opinion research 2018 and 2017 | Aldermore and

YouGov research 2016 | BDRC landlords panel Q4 2017

How are landlords set up

55% of landlords still set up as a sole trader

Majority of landlords have 2 – 5 properties

10% set up as limited company



Challenges



Challenges



“Bad

experience

with

previous

tenant”

“Brexit,

increasing

interest rates,

other landlords

exiting, political

uncertainty,

fewer

tradesman”

“Concern

about govt

change and

Mr Corbyn's

views”

“THE

GOVERNMENT”

“I can't be

bothered

with the

aggro”

“Higher tax

rates”

Good news

Over 40% of portfolio landlords expected to increase the size of their

portfolio:

o 64% are planning on buying houses

o 55% are planning on buying flats

o 39% are planning on buying commercial property



Good news

Its not all doom and gloom

34% of landlords are looking for a new BTL mortgage

25% will be looking to remortgage existing property

and capital raise



Why is it so complex?

Landlords with 11 or more properties consider themselves professional

They have the largest BTL borrowing:

o 23% between £500,000 and £999,999

o 29% between £1,000,000 and £1,999,999

2 in every 5 landlords are planning on buying their

next buy-to-let property through a

limited company structure



Why is it so complex?

• Need for top slicing

• Over 50% of landlords have complex employment status

0 5 10 15 20 25 30 35

Other

Part time employee

Self-employed (other)

Full time employee

Self-employed (Landlord)

Retired



What’s the opportunity?

Increased competition

Steady shift to complex/specialist buy-to-let

Move away from sole trader status

Change in portfolio make up and property type

Market factors such as interest rate rises



Intermediaries.aldermore.co.uk

Any questions?

opportunity knocks in specialist buy to...

Documents