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Non-Standard Credit Buy To Let Mortgage Product Launched

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Buckinghamshire Building Society has launched a new mortgage product aimed at landlords with adverse credit. Landlord Today reports that the non-standard buy to let (BTL) mortgage has been made available in response to demand. 

The product is designed for landlords with less serious adverse credit incidents on their record, such as missed payments on secured and unsecured loans, or missed utility bill payments. 

A spokesperson for the society says: “Our BTL Non Standard Credit mortgage is a new area of lending for the society, and fills an important gap in the market. Brokers are crying out for more options for their landlord clients who have experienced minor credit issues, with an insufficient level of choice on the market currently.”

“Landlords have not been immune to the cost of living pressures, and will benefit from the flexibility built into our new product. Buckinghamshire Building Society is determined to work closely with brokers, and ensure our proposition meets the needs of their clients.”

It is hoped that the new BTL mortgage will encourage more landlords to stay in or enter the rental market, which is currently affected by a cycle of reduced availability and rising costs for both landlords and tenants. 

Tenants have been battling with rising costs and higher competition for rental properties over the past couple of years, with no end in sight to ease the pressures on the market. More people are renting for longer as average house prices and mortgage rates continue to rise, forcing young people to delay home ownership and continue to rent or live with their parents.

BBC News reports that two-bedroom homes are now listed by letting agencies for an average of 25 days, which is 10 days more than before the pandemic. This is forcing people into making immediate decisions on whether to take a rental property after a brief viewing.

Those who work in the sector explain that the situation is driven by a lack of new rental properties coming into the market, while demand rises as people are excluded from mortgages. 

Ben Beadle, chief executive of the The National Residential Landlords Association, explained to BBC News: “Landlords selling up is the single biggest challenge renters face. The only answer is to ensure responsible landlords have the confidence to stay in the market and sustain tenancies.” 

Groups representing tenants call for further reform of the system, with an increased availability of social housing and more regulations for landlords. 

Letting agents advise potential tenants to start searching for a suitable property well in advance of their intended move in date; have all the relevant paperwork including payslips and references, and to be clear about the amount they can afford to pay in rent and deposits. 

They also advise renters to get to know local estate and letting agents, because they sometimes give a heads up about available properties on social media before the listings go live.