Disclaimer
Market Financial Solutions (MFS) are a bridging loan and buy-to-let mortgage provider, not financial advisors. Therefore, Investors are encouraged to seek professional advice. The information in this content is correct at time of writing.
Buy-to-let loan (BTL) investments have long been a cornerstone of the UK’s investment sector. In fact, it has now been 25 years since the first specialist BTL mortgage product was launched.
On 24 September 1996, the lending market opened its eyes to the demand for BTL investments. If anything, this arrived surprisingly late, given people have been investing in portfolios of rental properties for centuries.
In the 25 years since buy-to-let loans entered the mainstream, the market has grown and grown, both in terms of the property finance options available and the number of people considering BTL investments. Indeed, the success and growth of the bridging loan industry has been built around the demand for finance among BTL investors.
The benefits of BTL investments
The benefits of BTL investments boils down to two key factors:
1. Capital growth
BTL investors stand to benefit from the increase in value of their property or properties. In recent years, this has been significant. Between July 2011 and July 2021, the average UK property price rose from £169,866 to £255,535.
Source: Office for National Statistics
2. Rental returns
Landlords will also typically achieve rental income. Indeed, the investment is of course defined by the intention to ‘let’ it out to tenants.
The amount of rental income that can be achieved has also grown notably over recent years. As of August 2021, data shows that the average rental price for a new tenancy in the UK was £1,053 per calendar month. This is up by 6.9% from the same month last year.
Looking at the bigger picture, separate statistics show that between 2008 and 2020, the average monthly rent for private renters in England increased from £663 to £871.
Source: Home Let Rental Index – Statista
The combination of steady rental returns with the potential for long-term capital growth is ultimately what has driven so much interest in BTL investments over many decades.
BTL lending
As noted, a quarter of a century has passed since the first buy-to-let mortgage was unveiled. However, in the past ten years, the BTL sector has increasingly served by specialist lenders, particularly bridging loan providers.
Bridging loans have several appealing factors for buy-to-let investors. The first is the speed at which loans can be delivered – rather than taking weeks or months to secure a mortgage, property investors can receive a bridging loan within days of making an enquiry. This will prevent lengthy chains and enable them to pursue new purchases with positive intent.
Speed of finance has become a key factor in recent years. The UK property market is extremely competitive, and an inability to put up the required capital when required risks a buyer losing out on an investment opportunity to a rival bidder.
Another attractive aspect of bridging finance for buy-to-let investments is the flexibility that lenders us offer. Unlike rigid applications from traditional high-street lenders, Market Financial Solutions (MFS) reviews an investors’ full financial circumstances and is able to take into account the assets they hold and the experience they have in the market before then making a decision. This is why so many brokers and BTL investors choose to work with bridging lenders.
Unlike rigid applications from a traditional high-street lender, we’ll review everything on it’s own individual merit before making an informed decision, including:
- Your financial circumstance
- The assets you hold
- Your landlord experience
This is why so many brokers and buy-to-let investors choose to work with specialist lenders.
Looking for more information on buy-to-let bridging finance? Check out our residential and buy-to-let page.
Check out our case studies today.
Speak to Market Financial Solutions (MFS)
If you are interested in finding out how much you can borrow for a BTL investment, you can use our free bridging loan calculator.
Alternatively, our team can provide more information about what bridging finance options are available for BTL purchases. So, whether you require a loan for a BTL investment, or to renovate a BTL property, Market Financial Solutions (MFS) can help.
Get in touch with our team today and let’s discuss how we can support your BTL investments.
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