Mortgage adviser proposing new bank for buy-to-let owners

Posted under General by Michael

Struggling landlords who are unable to remortgage are likely to benefit from new schemes being proposed by the mortgage advisers.

The Bank of England, in its Financial Stability Report had stated that buy-to-let borrowers failing in mortgage repayment would be forced to sell at prices much lower than their purchase value as lending was becoming much tighter.

In the midst of warnings of increasing repossessions in private rented sector, caused by the collapse of buy-to-let lenders and housing market slump, there is a ray of hope for the landlords.

Mortgage adviser, Egerton Partners, is working on creation of bank of investors who might be willing to provide capital for buy-to-let owners whose property portfolios fall in the £5 million to £30 million range.

A partnership agreement between the investors and landlords would allow landlords to retain portfolio ownership while investors would benefit from return on properties up to a fixed limit. This type of arrangement would enable landlords to avoid sale of property at loss during market slump and may offer rise in rental income, if it goes beyond partnership agreement.

More schemes of this nature which will help the struggling buy-to-let sector and minimise repossessions are likely to emerge in the coming months, feel the experts.

More