John Heron, managing director of Paragon Mortgages, claimed that before considering investing, landlords needed to know all about what they were getting into and brokers were in a great position to pass on important knowledge.
The key areas where people had problems , according to Paragon, were buying property before assessing tenants and understanding what they were likely to want and were looking for, and understanding the demand and getting a suitable property in a correct location.
Heron explained: “Buying before assessment is a common mistake made quite often by amateur landlords, while understanding demand is key, though landlords can afford to be dispassionate on the state of the property if they are prepared to do the property up.”
Paragon claimed that there were too many people who think about the property and not the tenant, and the lender was encouraging new landlords to know the area before investing. Heron added: “Research is absolutely fundamental when it comes to moving into BTL.
Heron said: “This is an interesting period for mortgages as the non-conforming re-adjustment has caused increasing margins and tightened criteria. Fringe lenders who sold lots of products are now out of the game and self-cert is reducing due to regulation. BTL is the only area that still has legs.”
Lee Grandin, managing director of Landlord Mortgages, said: “Our client numbers have diminished slightly – we don’t see many new people in BTL. The clients we deal with are experienced landlords.”
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