HMO and student landlords worst hit as buy-to-let lenders withdraw products

Landlords managing student housing and houses in multiple occupation (HMOs) have been hit hardest by the property market lockdown, analysis suggests.

Many buy-to-let lenders have withdrawn remortgage products or tightened criteria due to it being harder to value properties amid the coronavirus pandemic.

Research by broker Mortgages for Business has found seven out of forty-nine buy-to-let providers in the market have stopped lending.

This is spread over different types of borrower and loan-to-value (LTV) though, with the number of products available for HMOs down 44% to 15 and those marketed for student lets have fallen 30% to 21.

There are now no remortgage buy-to-let products available for LTVs of 85% and above, while portfolio landlords have been least affected with just an 18% drop in relevant products, Mortgages for Business claims.

Steve Olejnik, managing director of Mortgages for Business, said:

“Lots of lenders have cut down on the sorts of landlords that they will lend to.

“They are pulling product ranges, tightening lending criteria and increasing margins.

“But different lenders are derisking against different kinds of landlord borrowers.

“So, while some lenders are no longer lending to first time landlords, there are still lenders who are.

“There is no need for landlords to panic.

“Landlords looking to remortgage have fewer options, but they still have plenty.”

Type of BTL Remortgage March 2020 April 2020 Change
First-time landlords 47 35 -26%
Portfolio landlords 40 33 -18%
Ltd company landlords 30 24 -20%
Student lettings 30 21 -30%
HMOs 27 15 -44%
BTL tracker loans 28 16 -43%
85% LTV BTL loans 3 0 -100%
Active BTL lenders 49 42 -14%

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