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HMO and multi-unit landlords achieving the highest rental yields

11 May 2018

- Yields on houses in multiple occupation are 1.3% higher than Q1 market average
- Precise Mortgages offers HMO tracker rates from 2.75% and fixed rates from 3.09%

New syndicated research* for the specialist lender Precise Mortgages reveals landlords running portfolios comprising houses in multiple occupation (HMO) and multi-unit freehold blocks (MUFB) are achieving the highest rental yields despite market averages dipping slightly in the first quarter of the year.

Average rental yields for HMO are the highest across all types of property at 7.1%, 1.3% above the market average. Yields for multi-unit freehold blocks are the second highest at 6% highlighting the opportunities for landlords to refocus portfolios, the study by BDRC Continental found.

Across all property types average yields dipped slightly in Q1 2018 to 5.8% from 5.9% in the last quarter of 2017 and are now at the same level as Q1 2017. The highest average yields of 6.7% were achieved on portfolios of between 11 and 19 properties, underlining the continued rise of the professional landlord. By contrast those with just one property achieved yields of 4.8%. Precise Mortgages’ dedicated portfolio team and online proposition ensures that the application process for brokers servicing professional landlords has been made as straightforward as possible.

On a regional basis, landlords with portfolios in the North West reported the highest rental yields at 6.7%. Central London portfolios produced the lowest average yields at 4.8%.

Precise Mortgages, which launched its HMO range more than two years ago, is focused as a specialist lender on responding to market changes and is enhancing its range to specifically address the needs of landlords looking to expand portfolios or invest in the North.

Alan Cleary, Managing Director of Precise Mortgages, said: “As HMOs attract multiple tenancies, gross rental income tends to outstrip single lets and rental income is more secure even if one tenant leaves a void.”

“Experienced landlords are looking to rebalance their portfolios and there is a real opportunity for brokers to support them to work with specialist lenders who are prepared to be flexible and have expertise across the widest product set.”

Precise Mortgages’ HMO product range includes two-year tracker rates from 2.75% and two-year fixed rates from 3.09% as well as lifetime trackers from 3.50% and five-year fixed rates assessed on pay rate from 3.69%. The portfolio lending limit has been increased to £10 million with a maximum of 20 properties with Precise Mortgages and unlimited with other lenders.

Full details regarding the Precise Mortgages buy to let range are available at www.precisemortgages.co.uk 

*BDRC Continental Q1 2018 Landlords Panel syndicated research report prepared for Precise Mortgages. Fieldwork was conducted online between 9th and 20th March among a sample of 1,043 National Landlords Association members

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Read our latest Thinking Outside the Blog post

09 May 2018

In this week’s blog, Kayleigh, from our Telephony Team discusses why up-to-date contact details are essential when processing a case. Click here to read it now.

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Brokers want Buy to Let innovation and consistency from lenders

19 April 2018
  • Stricter rental cover requirements are the biggest issue for remortgage customers
  • Precise Mortgages is supporting customers and brokers with a range of solutions and tools, plus a Buy to Let Mortgage Submission Guide

New research* from the specialist lender Precise Mortgages shows product innovation and more consistency on criteria are at the top of Buy to Let brokers’ wish-lists for helping to address the remortgage challenges facing landlords.

Its study found 50% of Buy to Let brokers want to see more innovative product approaches from lenders while 43% say increased consistency is needed on the criteria offered by lenders and the industry as a whole when assessing remortgage applications.

Other key changes brokers want to see from lenders, to help remortgage customers, include the launch of online rental cover calculators which was chosen by 41% of brokers. Enhanced service standards would also help address remortgage challenges according to 26% of brokers surveyed.

51% of brokers believe the introduction of stricter rental cover requirements is the biggest issue facing remortgage customers. On the subject of rental cover requirements, lack of clarity from lenders was chosen by 31% of brokers, while 29% pointed to a lack of consistency from lenders.

Precise Mortgages has introduced a number of product innovations to help landlords underserved by high street lenders. As well as a top slicing option, which enables landlords to use their earned income to top up any rental shortfall, the lender offers bespoke ICRs which reflect a customer’s tax position more accurately, helping them achieve the loan size they want. It also offers an online calculator and a submission guide to help provide a smooth application process and improve turnaround times.

Alan Cleary, Managing Director of Precise Mortgages, said: “Buy to Let brokers and their customers face a number of possible issues when remortgaging following the regulatory and tax changes in the market.

“Specialist lenders need to respond to their concerns with solutions for borrowers that the High Street will no longer service.”

*Research conducted by Pure Profile among 104 mortgage brokers specialising in buy-to-let conducted between February 13th and 21st 2018

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Precise Mortgages launches Thinking Outside the Blog

18 April 2018

Precise Mortgages has launched Thinking Outside the Blog, a series of fortnightly blogs written by experts from its Underwriting and Telephony teams.

Click here to view the latest blog post.
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Charter Court in top ten Best Companies To Work For list for third year in a row

28 February 2018

Charter Court Financial Services (Charter Court) has been ranked as one of the top 10 employers for the third year in a row in the prestigious Sunday Times 100 Best Companies to Work For list.

The Wolverhampton-based financial services company achieved sixth place in the top 100 Best Companies To Work For 2018 list which celebrates and showcases the very best in workplace engagement.

Charter Court, which has grown since launch in 2008 to employ more than 500 people at its Wolverhampton headquarters, maintained its high place in the list while remaining one of the fastest-growing specialist mortgage banks in the UK meeting customer demand for specialist mortgages, attractive savings products, exceptional value and great service.

The Sunday Times survey is the longest-running and most respected survey in the UK voted for by staff focusing on employee engagement.

Scores and ratings across a wide range of factors including leadership and fairness are based on the views of employees, and each year the questionnaires are revised and updated to reflect current concerns across UK workplaces to provide a detailed picture of what it is like to work at a particular company.

Ian Lonergan, CEO of Charter Court Financial Services plc, said: “We’re very proud to be in the top 10 of the Sunday Times 100 Best Companies to Work For survey for the third year running.

“The fact that the rankings are based on the views of the staff here underlines what an achievement this is and demonstrates the success of our focus on developing a positive workplace culture and team spirit.”

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