We need a new bank.

Many people within the industry are seeing increasing levels of new buy to let enquiries – we certainly have. The major issue, however, is still the lack of lenders and products in this marketplace. As predicted the merger of Lloyds and HBoS, while necessary, has not done anything to increase competition and so spur on the development of better rates and products.

So what we need is a new entrant or two to the market. The slightly leftfield emergence of Bank of China was a good sign, however their lending criteria knocked out so many potential clients, they will probably only do about 10 mortgages a month. Once one new bank enters (or re-enters, Bank of Ireland - if you’re listening) the market it will lay the groundwork, and soften the barrier to entry for many others. Like a group of mumbling boys, staring at their shoes at a sixth form dance, someone needs to make the first move.

Take Advantage while you can.

The mortgage lender, Advantage Home Loans, are still offering significant discounts on your current mortgage balance if you move away from them.
Many of these deals expire in October, so there is still a chance to benefit from the discount. We have many examples of where we have had to help negotiate the loan reduction even further in order to be able to remortgage away to another lender. The record loan amount that we have been able to have written off is still £91,000!

Tip of the week 1:     Don't miss Stamp Duty deadline!

A reminder to you that the Stamp Duty holiday headline expires at the end of the year. This may seem a long way away, but you know how purchases can drag, so realistically it will really only affect those putting offers on in the next six weeks or so.

For those who have forgotten the actions of the kind government, then I’ll remind you. For all properties valued between £125,000 and £174,000 stamp duty has been exempt since September 08. This will end on December 31st 09 and the 1% tax will be reinstated. Conclusion? If you are going to buy within this range, make sure it completes before the deadline!

Tip of the week 2:     Auction finance

We’ve had a lot of enquiries this week regarding using buy to let finance for auction properties. This can (and is) successfully practised, however - here are our top tips for getting the right mortgage on time:

1.   Use a lender who is quick. Sounds obvious, but you need that offer out in two weeks or less, so make sure you use a lender like BM Solutions who have proven to offer quickly.

2.   Get a decision in principle (DIP) first. 
 
Now, here’s the Catch-22:

If you don’t value the property before the auction, you run the risk of the lender refusing it based on the valuation.
If you do value it before the auction, you may get outbid and you’re down your valuation fees. (With some lenders they are hundreds of pounds). So? 
 
3.   Get a private valuation first (which is a fraction of the price of a mortgage valuation).  Use the same valuation company that the lender would use (ask us) so you can confirm with the valuer that the lender would be happy to lend. 

So based on the assumption you win at auction, you have the decision in principle, you have a valuation that confirms the property is suitable for lending and you can then submit the full application. This should give you far more confidence to bid.

There are different nuances of this however, for example by making it transparent with the lender and valuer means you will get a timely mortgage offer.

Call one of our advisors today for more information 01424 205 373