Landlords who remortgage may struggle to find a new product

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22 Feb 2018

If you bought a buy-to-let property in 2016, your remortgaging options may be limited!

Author: Greg May

Back in March 2016, there was a surge in property purchases as landlords rushed to complete their sale before stamp duty on second homes increased to 3%. This rush to beat the change resulted in an 87% increase in housing transactions according to data from The Land Registry.

Many landlords are likely to have secured themselves a two year fixed deal and so in March of this year, there will be an unusually high number of landlords reaching the end of their mortgage deal.

Greg May, Director of Financial Services at Romans explains, “Landlords who bought before the stamp duty increase in 2016, are not only at risk of overpaying by being automatically transferred to the lender’s standard variable rate product, but may also find securing a new deal increasingly difficult due to the changes in mortgage lending criteria.”

Those who do not act when their fixed deal comes to an end may run the risk of being automatically placed onto the lenders standard variable rate product which could result in higher monthly repayments. The newly introduced stress-testing on buy-to-let mortgages is designed to ensure that should mortgage interest rates rise, the landlord can still cover the cost of the mortgage.

However, even when they do act to secure a new deal, some landlords may find that their options are limited as mortgage lending criteria for buy-to-let properties has become much tighter. This may prevent some landlords who aren’t aware of how to get themselves in the right financial position to remortgage from securing a new product.

Greg continues; “Landlords who borrowed at the higher end of the loan to value threshold are likely to feel the changes to lending criteria the most.

“Those who are unable to remortgage may be able to transfer onto a different product with their current lender but this does mean that their options are extremely limited.

“Ideally, landlords want to be able to pick between a number of different products from a variety of lenders in order to find the right deal for their circumstance”

Typically a mortgage application process takes around 6-8 weeks to complete, and so many landlords will need to act now in order to find the right deal for their circumstances.

Landlords are faced with a number of options from increasing their rental payments to working with a specialist mortgage advisor to create a business plan and demonstrate that they remain able to repay their mortgage despite the change in criteria or, to find a different product.

Greg summarises; “With more and more changes coming into effect which impact landlords including mortgage lending criteria and taxation changes to name a few. As a result it is becoming increasingly difficult for landlords to do it themselves, this is where working with expert lettings and mortgage advisors tend to benefit.”

For more information about the financial services we provide our landlords, contact Romans financial service team on 0118 3219 536



There is no guarantee that it will be possible to arrange continuous letting of the property, nor that rental income will be sufficient to meet the cost of the mortgage.

Your property may be repossessed if you do not keep up repayments on your mortgage.

There will be a fee for mortgage advice. The actual amount you pay will depend upon your circumstances. The fee is up to 1% but a typical fee is 0.3% of the amount borrowed.

MAB 9127


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The service was excellent throughout the process and made moving a simple and enjoyable experience " R. Swiatek