The UK housing market has opened up since the end of May, with visual inspections resuming albeit more quickly in England. This means that buy-to-let mortage lenders are also returning to a more normal approach to business. However, the recovery of the market will take time.

Positive improvements in the marketplace have seen many lenders launching new product ranges, offering higher loan-to-values (LTVs) particularly in the 75 per cent LTV bracket, providing more options for landlords. However, there is still a lack of competition in the 80 per cent LTV bracket which could create difficulties for landlords who are more highly leveraged when looking to remortgage.

Now that physical valuations can be carried out, some lenders have returned to more complex lending such as on HMOs, multi-unit blocks and limited company applications. Foundation Home Loans recently launched a selection of packager exclusives for standard and large HMOs which are available through selected partners including ourselves. However, it was disappointing to see Barclays withdraw from both multi-unit and limited company lending.

There are also competitively priced buy-to-let mortgages available for standard properties from high street lenders and some excellent product transfer rates for existing customers, including a 1 per cent 1-year fixed rate currently being offered by TMW.

It is likely that the marketplace will continue to develop in the coming weeks as more lenders respond to the new normal and we may see more options in niche areas of lending such as for holiday let properties.

There has been a fair amount of concern about the impact of coronavirus on the ability of tenants to pay rent during the crisis and the effect this could have on landlords. Given the government ban on starting the eviction process before the end of August, some pundits predicted that there could be a surge in eviction applications post-Covid-19. However, a poll commissioned by the RNLA questioned over 2000 tenants and 90 per cent had been paying their rent as usual, which suggests that a concern over a spike in evictions could be unfounded. 84 per cent had not needed any support from their landlord, and of those that did three quarters received a positive outcome.

Even though this report paints a good picture,there are some landlords having trouble collecting rent for their properties who have applied for a mortgage holiday with their buy-to-let lender. This may provide a short-term solution, but how will it affect a landlord’s ability to access finance post-coronavirus?

Although applying for a mortgage holiday will not affect a customer’s credit file, lenders may reasonably ask why it was needed.As they assess the risk of lending to an applicant, lenders will want reassurance that there aren’t any existing financial issues with the property, portfolio or business in question. This may make it more complicated for those who have taken a mortgage holiday when they seek further finance, but it remains to be seen how this will play out.

As the UK housing market gains momentum, landlords may be looking for their next opportunity to expand their portfolio and considering the most cost-effective way of doing this. There have been questions around whether landlords who run their property business via a limited company could use the government-backed Bounce Back Loan Scheme to fund further property purchases.

Small businesses can apply for up to £50,000 with no interest to pay for the first 12 months, after which the interest rate is 2.5 per cent. This could seem like a relatively cheap way to raise a deposit;however, lenders do not normally accept loans as a source of deposit and using the BBLS to profit from further property purchases is not the intention of the scheme.

Overall, the buy-to-let mortage market is making a steady recovery and this is likely to continue in the coming weeks and months, providing more options for landlord clients.

Over the last couple of months there have been many conversations around the onus on students to pay rent for university accommodation during the coronavirus lockdown when they have returned home to live with their parents and are no longer using the property and facilities provided. It is a legitimate issue and most people can empathise with students facing this dilemma. 

For students in university owned accommodation, many have had their rent and related fees suspended whilst the university is closed, however the scenario is more complex for those living in private rented property.

Tenants in privately owned accommodation are still required to pay their rent in accordance with the contract they have with the landlord. Some tenants were under the impression that because landlords were entitled to apply for a 3-month mortgage holiday on their buy-to-let properties, that they wouldn’t have to pay rent. This is not the case and tenants are still required to fulfill their obligations where they can.

A lot of landlords have been demonstrating support towards their tenants during this period and have been keen to find solutions that work for both parties. Although it is right to support the concerns of those who are no longer living in their student digs or struggling to pay rent due to the impact of Covid-19, it is important to also remember that most landlords depend on their rental incomes to support their own livelihoods.

The National Residential Landlord Association (NRLA) has recently conducted a survey of 4500 landlords which shows how tenants facing financial difficulties are being “supported by landlords willing to take a temporary financial hit.”

In the survey, 44 per cent of landlords have been asked for help by their tenants and 90 per cent of those asked had been able to provide it. The type of help been offered included rent deferrals, rent reductions, rent-free periods, early release from tenancies and refunds on HMO service charges.

The survey also shows that 54 per cent of landlords were experiencing issues with tenants paying rents or unexpected voids. Of those dealing with tenants falling into arrears, 60 per cent had lost at least a month’s rent.

This data clearly demonstrates the impact that the crisis is having on landlords and that they are doing what they can to support their tenants during this unprecedented period.

There may be further concerns for landlords who rent to students, especially those who normally provide HMO accommodation to serve the sector. Cambridge University recently announced that it would be running all its lectures online for the next academic year and other further education institutions are likely to consider similar approaches to delivering their courses.

The result of having lectures delivered online and maintaining social distancing measures will impact on the whole university experience that students normally enjoy, so the further education sector is likely to report a reduction in student admissions during the 2020/2021 academic year particularly from international candidates.

This gives rise to the question of how the demand for student accommodation will be impacted if fewer students are required to live near campus to attend lectures. It also leads to questions about whether landlords will move away from the student sector to focus on single family lets or professionals sharing properties, leaving a shortage in supply for those who do seek student accommodation.

It is difficult to predict with so many unknowns, but for those landlords already experiencing rental voids due to Covid-19 repercussions it is certainly something to contemplate, especially for those who own student HMOs. In a lot of cases, it may be financially untenable to convert HMOs back to a single family let as it is likely to devalue the property considerably. However, there is a growing trend for professional sharers opting to reduce their rent expenditure by living with others, especially at the start of their careers. Some HMO landlords may simply shift their focus onto this area of the rental market.

It is important that landlords feel confident to remain in the buy-to-let sector as we ease out of lockdown and start to recover from the impact of coronavirus. If too many decide to leave, it will only further fuel the housing crisis leaving more tenants chasing fewer properties.

The opening up of the UK housing market, including the lettings market, has been welcomed by landlords as the lockdown measures are easing and visual inspections are resuming. The government has published guidelines on how to undertake the various stages in the letting process such as viewings, safety inspections and tenancy check-ins. This should kick start the buy-to-let sector and there may be some good opportunities for landlords to expand their portfolios, especially if some sellers are keen to move quickly.