I start with Kensington Mortgages this week. The lender has launched a number of new products including options to cater for those looking at investing in Houses of Multiple Occupation (HMOs). Similar to a normal Buy to Let, bought for investment, capital growth and income potential, yet these products allow for more than one family occupation and each on a separate assured short-hold tenancy agreement (AST). This can increase the rental yield return achievable for the owner and these products allow for properties with up to six bedrooms. HMO’s normally require a licence from the council and investment will be area specific. Good for near colleges, universities, commuter facilities etc. This is an increasing market as more and more people rent a room, over renting a whole house. Demand for specialist products which require a more individual approach will grow as investors look for ways to derive greater value from their investment.
Kensington have also launched products which allow for property conversions in to multi units, that still remain on one title. For example, where a house has been converted in to three self contained flats. Or where a property has a separate annexe etc.
New Lender Vida Homeloans has also expanded their distribution this week to include AToM. Their products include HMOs, Buy to Let lending in a Limited Company name, Portfolio landlords, ExPats, and Buy to Lets for those with impaired credit, so County Court Judgements, Missed payments, etc.
The Buy to Let sector generally is becoming very competitive and despite an increasing number of options and new lenders launching in to the market, demand is still increasing. Whilst first time buyers struggle to get on the property ladder and savings interest rates remain low, many continue to invest long term in to property and there’s no immediate reason why this should change. However, with all of the recent tax changes on Buy to Lets, you should not only seek professional mortgage advice, but tax advice from an accountant who understands property.