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 Cardiff*
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, Cathays,Llandaf, Riverside, Terrace. Clifton East, Grovewood, Whitchurch, Pentrych, Butetown, Article 4 Activity Blackburry Hill, Sherrin Way, Plasnewydd, Pontprennau, Rhiwbina, Above 6-beds planning required Clifton Village, Henbury Penylan, Cyncoed, St Fagans for whole borough
*Rent Smart Wales 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