We often need to move quickly for our borrowers, but this can be made difficult when our clients are making their first ever investments. That lack of experience can make it harder to underwrite a deal, and get a loan issued asap.
We see these kinds of cases often. A first-time landlord may require a bridging loan to secure a residential opportunity they found, quickly, for example. Rival buyers might be starting to take interest in the property too, and so they need capital within mere days to secure the asset before it’s too late.
As a first-time landlord would have no other investment assets however, many lenders would have trouble ascertaining how secure this investment would be. But, we are open to first-time landlords. To cover our bases, we would work closely with the borrower to determine how ready they were.
A Serious Property Investor
As we may have no other investments to compare to, we would look into the borrower’s details to ensure they were prepared for what was ahead of them. We’d want to make sure they took their first BTL purchase very seriously.
So, for example, say they aimed to target young professionals with an HMO situated just outside a city centre. This would be a prime location for the target market involved. The underlying borrower would have showed us clear evidence that they had strategically, and sensibly planned for the long-term with this investment.
We’d then look to see if this planning was (or would be) proving successful. In this set up, we’d expect, and hope to see that potential tenants had expressed an interest in the property. This interest would also help with a potential refinancing exit strategy, as high street lenders would likely feel more comfortable with a landlord who had their affairs in order.
Seeing all this would minimise our risk in lending to a first-time landlord. It would allow us to deliver funding quickly, allowing the borrower to lock-in their BTL asset.
A Surprisingly Optimist Outlook
It’s not surprising, to us at least, that there may still be keen first-time landlords out there in the property market. Despite all the recent budget rhetoric, most landlords (84%) plan to stay in the BTL sector without making changes to their investment portfolio over the next 12 months. In fact, 4% expect to actually increase their portfolio size.
Those who plan to expand may be in for a few months of great potential. Some landlords are likely to sell up over the coming months, creating opportunities for buyers.
We’ll be there for these buyers as they look to take advantage while they can.
