Remortgage Business and landlord impact.
Industry data shows that a vast amount of 5-year fixed-rate mortgages will be coming to an end this year, resulting in a potential surge in remortgage business.
Landlords UK-wide will be looking to get themselves locked back in amid fears of rising rates following the Bank of England Base Rate increase.
However, this is not the only incentive for landlords. February saw the largest monthly rise in house prices for 20 years, which is somewhat of a reflection of the last 12 months where we have seen asking prices increase by around 9.5%.
How is this a benefit for landlords?
With house prices increasing vastly over the last 12 months especially, those coming to an end of their 5-year fixed rates will benefit from capital appreciation over a 5-year period. What impact does this have? Well when landlords come to remortgage, there is the potential of raising finance from their portfolios whilst remortgaging, allowing them to continue on their journey towards their property investment goals.
For example, Person A has a portfolio worth £200k sitting at 75% LTV in 2017. If this portfolio has risen to £300k in value over 5 years, then Person A can raise an additional £75,000 from their portfolio, by taking this back up to 75% of the new value (These are indicative numbers for illustration purposes and may not truly reflect the market)
Combine this with the fact that rental income inflation reached a 13-year high this year, and the fact that house price growth is set to slow this year, and it could be a great year for landlords’ investment prospects!
IT'S GOOD TO TALK
Submit our online Client Enquiry Form or contact the team today on Tel: 0800 774 7045.
