Rising to the Challenge of Buy-to-Let Change

David Whittaker CEO Keystone Property Finance Limited Company Borrowers

Keystone’s pipeline - by value Completed cases - by value

31% 44%

56% 69%

Ltd Co Individual Ltd Co Individual

Call 0345 148 9086 Mark Long’s Presentation

Call 0345 148 9086 Mark Long - Observations

Call 0345 148 9086 National Landlord Investment Show

London Olympia 21st March 2019

Ian Duncan-Smith, MP Andrew Neil, Broadcaster

Landlord A - Male Landlord B - Female • Portfolio of 15 properties in South • Portfolio of 11 properties in Greenwich Yorkshire • Whole portfolio owned in own name • Most properties owned in own name • Acquired over the previous 5-10 years • Lifted rents by £75 in the last 18 months • Will sell and exit the market over next 2 • Believes his position is better as other years landlords exit the market

Call 0345 148 9086 Purchases vs Remortgages

Purchases vs Remortgages

79% 74% 75% 71% 69%

31% 29% 26% 25% 21%

H1 H2 H1 H2 YTD 2017 2018 2019 Purchases Remortgages

Landlords are still active but cautious of purchases. Source: CML now UK Finance monthly data

Call 0345 148 9086 Product Selection

Keystone's Product Selection - Pipeline Keystone's Product Selection - Completions

14%

26% 4%

4% 70%

82%

2yr 3yr 5yr 2yr 3yr 5yr

Keystone doesn’t offer tracker or discounted rates, these are all based on fixed rates.

Call 0345 148 9086 Fixed Product Selection – UK Brokerage

UK Brokerage Product Selection - Q1 2019 UK Brokerage Product Selection - Q4 2018

8% 18% 4%

5%

77% 88%

2yr 3yr 5yr 2yr 3yr 5yr

Call 0345 148 9086 Portfolio Landlords

Pipeline cases Completed cases

46% 51% 49% 54%

Portfolio lanldords Non-portfolio landlords Portfolio landlords Non-portfolio landlords

Max number of properties held by landlord - 117 Max number of properties held by landlord - 123

Call 0345 148 9086 eTech BTL Hub Lender Dashboard

Call 0345 148 9086 Valuation Experience

Valuation Experience 100% Valuation Outcome Loan Outcome 98%

96%

94%

92%

90%

88%

86%

84%

82% Standard property Specialist property Standard property Specialist property Remortgage Purchase

• 83% of loans had no loan adjustment at all.

Call 0345 148 9086 HMOs – A new world from 1st Oct 2018

• Removal of 3 storey rule

• 5 or more persons from 2 or more households now require a mandatory licence

• Minimum room sizes o Single room must be 6.52sq mtrs o Double room must be 10.22sq mtrs

• Some councils may apply higher thresholds as well as o Selective licencing o Additional licencing

• Does the property now need checking for C4 or “Sui Generis” planning

• HMO pool – expected to increase from 60,000 to 237,000 properties (Source: DCLG)

Call 0345 148 9086 Local Councils’ Positions

Reading Bristol *

Currently licenced HMOs 1,011 1,762 3,574

Expected number of new 3,000 Not known Not known properties

Typical licence fee (5 bed HMO) £468** Part 1 £770 £630 Typical licence fee (5 bed HMO) £952 Part 2 12 weeks Current SLA 500 application backlog Not known (recent surge in applications) Mount Area, Park Redlands, Cotham, Redland, Clifton West, Katesgrove Wards, Jesse Lawrence Hill, Ashley, Cabot, ,Llandaf, Riverside, Terrace. Clifton East, Grovewood, Whitchurch, Pentrych, Butetown, Article 4 Activity Blackburry Hill, Sherrin Way, Plasnewydd, , , Above 6-beds planning required Clifton Village, Henbury , , St Fagans for whole borough

*Rent Smart rules apply **Transparency of Fees Court Ruling Call 0345 148 9086 Buy-to-Let Lending

£Bn

50

45 £44.6 40 £40.6 £35.8 £36.8 35 £37.5 £32.3 30 £30 £33

25 £24 £27.2 £27.4 20 £20.7 15 £16.4 £14.2 10 £10.4 £8.5 5 £9 £6.8 £3.5 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Source: CML/UK Finance | Keystone predictions | Keystone Ltd Co lending predictions

Call 0345 148 9086 Important Role of a Buy-to-Let Broker

• More landlords will become ‘portfolio’ landlords and will need support going forward

• Are your landlords holding HMO properties unknowingly?

• What will their existing lender do? • Will it pass planning and mandatory licencing rules?

• If they’re planning to incorporate, who should they approach for advice?

• What should their future strategy be? • HMOs • Holiday lets • Semi-commercial…

Call 0345 148 9086