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Buy-to-let - a silver lining?. Steve Carruthers / Graham Felstead Corporate Account Manager / Head of Corporate Accounts 08459 00 11 10 Agenda. Market overview Opportunities for buy-to-let Advising on buy-to-let - how you can help Why NatWest?. Market overview.

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buy to let a silver lining

Buy-to-let - a silver lining?

Steve Carruthers / Graham Felstead

Corporate Account Manager / Head of Corporate Accounts

08459 00 11 10



Market overview

Opportunities for buy-to-let

Advising on buy-to-let - how you can help

Why NatWest?

market overview

Market overview

Pressure on disposable income, weakened housing market

Movements in the Base rate - how does this affect the market?

Impacts on interest rates / products:

credit crunch


less FTB products, lower LTV restrictions

First-time buyers - less demand due to:

reduced confidence, less affordability, tighter lending criteria

Home movers - uncertain market, negative equity threat

Where does this leave the buy-to-let market?

market overview1

Market overview

House price growth (CML data)

is buy to let affected

Is Buy-to-let affected?

Michael Coogan, CML Director General:“Tenant demand for private rented property remains strong, and buy-to-let is fulfilling an important role in helping to deliver an increased flow of high quality homes to rent.Buy-to-let has remained resilient in the face of the funding constraints that have affected the sector and the wider mortgage market.”Daily Telegraph - Feb 08

The CML expects to see a continued “healthy appetite” for buy-to-let finance in 2008 in line with continued demand for rental property.

is buy to let affected1

Is Buy-to-let affected?

Number of buy-to-let mortgages:

2006: 846,000;

2007: 1,083,000 (up 23%!)

is buy to let affected2

Is Buy-to-let affected?

Buy-to-let sector represents 12% of gross mortgages, up 50% from 8% (June 2005 to June 2007)

opportunities in the buy to let market

Opportunities in the buy-to-let market?

2007 Figures from CML and ARLA:

90% of landlords have no intention of selling for some time

just 2% of landlords intend to sell when their tenants’ lease expires

40% of landlords expect to invest further in buy-to-let market

Only 0.12% of all buy-to-let mortgages in force were repossessions in Q4 2007, compared to 0.16% in the residential mortgages sector

First-time buyers: nervousness / affordability issues mean more will turn to the rental market

Buying property to let is no longer a short-term gain, but it remains a long-term investment

opportunities in the buy to let market1

Opportunities in the buy-to-let market?

Migration impact:

over 500,000 people are coming to Britain from abroad each year - typically they rent

Regional variations - one size does not fit all

More and more multiple applicant buyers (deposits/affordability)

broker opportunities for buy to let

Broker opportunities for Buy-to-let

Understand the buy-to-let market (finding property, landlord responsibilities)

Advising on:


know the market, find the best deal for the customer

Bridging finance

understand short-term funding, open / closed loans

negotiate fees with lender


Look at cross-selling opportunities (e.g. buildings and contents, legal expenses, emergency assistance, Rent guarantee and Tenant’s insurance

look at commission opportunities

broker opportunities for buy to let1

Broker opportunities for Buy-to-let

Stay in touch - regular 6/12 month reviews

possibilities for fee-based advice

Generate links with associated professionals - solicitors, estate agents, letting agents

buy to let knowledge finding a property

Buy-to-let knowledge - finding a property

Build relationships with estate agents / rental associations to understand local opportunities

Current national and local issues include:

Northern market prefers ‘renovate to rent’ - suburban houses

Southern market prefers centrally located new-build flats

Southern buyers looking North for ‘value’ purchases

Find key local hotspots for growth (industrial regeneration areas)

Is the property right for potential tenants (e.g. near to a school for families, transport links, central for flats)

buy to let knowledge being a landlord

Buy-to-let knowledge - being a landlord

Need to know/understand:

Running costs - ground rent, service charges, repairs, letting/management fees

Landlord and tenant law

Tenancy agreements

Safety regulations and responsibilities

Costs of using a letting agent (could be 10 -15% of the rent)

Costs/benefits of furnished v unfurnished properties

Advising on all of these can offer income opportunities

where to go for more help

Where to go for more help

A number of associations have plenty of information available:

Council of Mortgage Lenders (

Association of Residential Letting Agents (

Royal Institution of Chartered Surveyors (

National Association of Estate Agents (



Buy-to-let market is sustainable

Significant long-term income opportunities

Lots of help is available

NatWest buy-to-let proposition offers a full range of solutions

natwest how we can help

NatWest - how we can help

NatWest is the specialist buy-to-let lender for RBS Intermediary Partners

Our buy-to-let proposition:

up to 4 applicants on a mortgage

a wide range of property types can be accepted

up to 10 loans accepted (across the RBS Group)

up to 10% overpayments accepted during the loan period

Fixed £ product/arrangement fees (not a % of the loan)

One simple rental cover tier: 125% at BoE rate + 1.75%

up to 85% max LTV (65% for new build flats)

fees-free re-mortgage package available

thank you

Thank you

For more information:

call: 08459 00 11 10