We all understand why property is not flavour of the month for a lot of lenders with bad debts, questions over values and a lack of demand for new build due to restrictions in mortgage lending, but we are seeing many long established landlords having their funding lines cut.
The number of new clients we have seen over the last quarter who have been told to go by their banks is at an all time high. I have seen 40 year connections told, please repay we don’t want you any more. If you have long term funding agreed you will be all right as long as you don’t go into default.
The problem is with loans that are on an interest only basis with repayment due this year. With one bank you have to be able to prove serviceability at a rate of 11% and that’s after they’ve deducted 30% off your rent!
It’s important you have a manger who understands property, has a good reputation within the bank and is clear and transparent about credit policy. The more notice you have the better it will be.
Thankfully there are banks that are still open for business, more are coming back into the sector at £1m+ and more are planning a return.