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Buy-To-Let Opportunities For Pensioners

Buy-To-Let Opportunities For Pensioners

Buy-To-Let Mortgage Lenders Set To Offer Retiree’s Mortgages

Buy-to-let mortgage lenders are reconsidering their age restrictions following the Government’s announcement to give pensioners unlimited access to their retirement savings.

The move has prompted a specialist mortgage lender to offer pensioners under the age of 70 35-year mortgages, while retired people are being targeted with targeted  by buy-to-let adverts with senior appeal.

Managing Director of The Mortgage Works (TMW), Henry Jordan, said they have recognised that buy-to-let is a popular source of retirement income, stating “The recent budget announcements could see even more pensioners considering buy-to-let as an option for their retirement savings.”

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Fresh Warnings Over Rent-To-Rent

Fresh Warnings Over Rent-To-Rent

Rent-To-Rent Contracts May
Breach Mortgage Agreements

National newspapers are claiming that the Rent-To-Rent strategy for maximising profits from rental properties is immoral and illegal

Private rental sector landlords who utilise a rent-to-rent strategy, by which a property investor agrees to rent a property from the owner with the intention of sub-letting it to tenants for a profit, are being urged to check with their mortgage lenders that the practice will be allowed.

The warning was printed in The Sunday Times and follows last week’s news published by The Guardian newspaper and landlord news portal LandlordToday.co.uk, on the rent-to-rent phenomenon, which drew a mixed reaction.

Some lenders will not allow sub-letting, including The Mortgage Works (TMW), although BM Solutions does permit sub-letting.

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No Buy To Let Mortgages For Landlords with Benefit Tenants

No Buy To Let Mortgages For Landlords with Benefit Tenants

It has emerged that one of the property investor’s best mortgage resources is going to have restrictions placed on their Buy To Let mortgage products.

The Mortgage Works, who were once the lender of choice for hundreds of UK property investors, have changed their mortgage acceptance and lending criteria to such an extent that they will no longer accept buy to let properties that will be inhabited by any tenants claiming any form of state benefit, local housing allowance (LHA) housing benefit or even the upcoming Universal Credit.

As the major buy to let mortgage lender used by portfolio landlords, this news is a real blow for anyone with DSS tenants or even working tenants claiming Housing Benefit.

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Mainstream Buy to let mortgage lenders are changing their products and lending policies as they prepare for the new rules to be implemented that will tighten up on the necessary criteria borrowers must meet, causing a stir in the market.

The Co-Op Bank announced this week that it was scrapping residential “Interest Only” mortgage products but the lender has confirmed that landlords can still obtain interest-only mortgage loans for the purchase of buy to let rental properties.

Platform will continue to offer interest only mortgages for the purposes of purchase and refinance for landlords, but has pulled all similar products for residential homeowners offered through the Co-Op, Platform and Britannia.

LloydsTSB also withdrew “Interest Only” residential home loans but similar “Interest Only” Buy-To-Let mortgage products for landlords will remain in place for the foreseeable future.

LloydsTSB have said that they intend to reduce loan exposure by cutting all UK mortgage lending by 3% stating that borrowing costs on the wholesale money markets were too high.
Instead, LloydsTSB want to raise more cash from their own savers to underwrite all forms of lending and want to raise deposits by 3% .

Banks, building societies and mainstream mortgage lenders tend to view the UK buy to let market as a business with rent from tenants used to underwrite interest payments and long-term capital appreciation, as the property increases in value, is accepted as a suitable repayment method.

Landlords can utilise Rent Guarantee insurance from specialist landlord service providers to ensure that their rental income remains uninterrupted and they can cover their Buy To Let mortgage payments.

Property investors and landlords don’t need to panic and should shop around for the best deal on the market. However, meeting the increased criteria could prove too much for some investors and they may be forced to seek alternative vehicles for finance or use alternative investment strategies such as Lease Options to control property.

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