Robust tenant demand presents “significant opportunities” for mortgage advisers to assist clients, a report from Foundation Home Loans has suggested.
The report, Q2 2024 Landlord Trends, found there is positive tenant demand with 82 per cent of landlords describing it as “strong”.
Foundation Home Loans found landlords believe this offers “significant opportunities” for mortgage advisers to assist their clients.
Foundation Home Loans director of sales, Grant Hendry, said: “Despite a challenging market environment, landlords are finding ways to maintain profitability and expand their portfolios.”
Hendry added that increased average rental yields, ongoing preference for limited company ownership and high tenant demand are all encouraging trends which keep on emerging.
He argued this should provide mortgage advisers with the opportunity to secure business and help landlords navigate the market.
“There is clearly a significant remortgage market to target in the months and weeks ahead, with a number of the landlords surveyed outlining how they had multiple mortgages coming to an end which will need refinancing,” he added.
The number of landlords looking to remortgage was also detailed in the report, finding that over one-third plan to remortgage or undertake a product transfer in the next 12 months, anticipating that they will refinance 2.5 products on average.
Of those who will be refinancing, 38 per cent have one mortgage to refinance, 34 per cent have two, 12 per cent have three, 8 per cent have four, and 7 per cent have over five mortgages due for maturity in this timescale.
Foundation said that the level of mortgages coming up for remortgage, and the average amounts being owed, presented a “sizable opportunity” for mortgage advisers to offer competitive refinancing solutions and to earn strong levels of procuration fees.
“In an interest rate environment which has seen some falls already, we believe the opportunity to remortgage is now greater than in the last couple of years, and we’ll see a growing cohort of landlord borrowers able to remortgage,” Hendry added.
“Again, this presents a strong opportunity as it doesn’t just bring the remortgage into ‘play’ but clearly the opportunity to talk to existing landlord borrowers about any other product/service wants and needs they might have.
“The cost of financial properties and portfolios, even with higher yield and strong tenant demand, continues to sit heavily with landlords and is impacting their views on whether now is the time to add to portfolios.
“It is to be hoped the new government is committed to increasing supply in the PRS, as it certainly requires more housing in order to meet the tenant demand that is so clearly there.”
tom.dunstan@ft.com
What's your view?
Have your say in the comments section below or email us: ftadviser.newsdesk@ft.com
