Rod Thomas, investment expert, discusses the troubles landlords will have when remortgaging their investment properties.

1. IS A BUY-TO-LET
REMORTGAGING
CRISIS ON THE
HORIZON?
R O D T H O M A S

2. 2018 opened with fresh headaches for
buy-to-let (BTL) investors. As I’ve
chronicled extensively, the BTL sector
has become just a shadow of its former
self in the face of regulatory scrutiny
and changing economic patterns, but
now, landlords must face a new range of
obstacles in order to refinance their
mortgages and secure favorable terms.

3. Landlords’ present dilemma has its
roots in April 2016 when the
government first applied a 3% stamp
duty land tax surcharge on any new
purchases. Immediately before the
tax new went into effect, landlords
scrambled to buy new properties.

4. However, the least expensive mortgage for most
borrowers is a two-year fixed rate deal, and since that
term has expired, many experts expect that a stampede of
landlords attempting to remortgage as a way of keeping
their costs low.

5. Unfortunately for the landlords, a recent spate of
regulatory changes has made it more difficult for them to
acquire financing.

6. This is part of the reason why 70% of landlords reported
challenges securing new mortgages in recent months and why 28%
of them feel that their mortgage applications are more likely to be
denied—and their concerns may be valid.

7. As a result, landlords may be unable to
need to refinance their mortgages and
will consequently pay higher mortgage
costs that eat into their earnings. And, to
make matters worse, higher tax relief on
mortgage interest is fading away, which
will further erode landlords’ profits.
These changes represent yet another
nail in the coffin of BTL investment.

8. THANK YOU FOR
WATCHING
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