The mortgage options for landlords hit by Covid

This proves that there’s ongoing demand from buy-to-let investors and a growing need for more choice, which is important for customers moving forward, particularly in the aftermath of the pandemic.

The private rental sector has been hit quite harshly during the pandemic, especially in those early months. According to recent BDRC research, over eight in 10 landlords have been negatively impacted and some have seen a reduction in rental income achieved during the period.

Beyond the obvious impact on a landlord’s cash flow, when rent isn’t received – whether they have one property or 20 – it can also stop them from remortgaging and/or purchasing further properties if their portfolio isn’t showing to be performing well enough when they approach a lender. However, some lenders, like Pepper Money, can assess the portfolio in its entirety. This means for landlords who may have received reduced rent – or no rent at all – on one or more properties in their portfolio during the last 12 months, they could still access the market, providing the others are performing well enough to subsidise them.

Another issue affecting a growing number of landlords, due to loss of rent or reduced rent payments, is adverse credit. We’ve seen through our own research how common this is amongst the UK population and it isn’t just residential mortgages that are required for those not fitting the mould of the mainstream lenders.

The issues being faced by landlords in the current market raises challenges for brokers sourcing the best solution for their customers, the biggest of which is the varying qualifying criteria across the market. This is why, at Pepper Money, we have kept our criteria as simple and transparent as possible, whilst also maintaining the flexibility to help landlords with a diverse range of circumstances.

There’s talk of an expected increase in buy-to-let applications when the SDLT holiday comes to an end as there could be the potential for picking up one or two good deals on properties that didn’t get over the line in time. This will be interesting to watch and we’re ready to support intermediaries with any additional buy-to-let enquiries they may see.

We recommend keeping in touch with your landlord customers in the coming weeks to make them aware of the opportunity of the diverse range of mortgage options that are available to them as we come through this difficult period.