There is currently technical uncertainty in the residential property valuations profession and in the current climate of residential property generally, including the buy-to-let market.
The primary drivers include:
- Brexit;
- Stamp duty rises on second homes; and
- Tax breaks removed on previously exempt items for residential property investments, particularly interest on mortgage repayments.
For residential investors, the opportunity remains to remortgage at preferential rates and lenders products are reflecting this demand. This goes someway towards eliminating the inherent risk involved with purchasing bricks and mortar.
Commercial landlords, developers and alike also have the opportunity to protect themselves against limited income growth as follows:
- By remortgaging on an interest cover loan or trading loan, the borrower can then expect to have lower overall costs of holding property
- furthermore, by remortgaging for a new term this increases the certainty amongst property investors that the asset is insured against any future rises in interest rates to due economic factors.
We have seen an increasing number of High Street lenders prepared to increase lending on a remortgage basis and in fact, most business from borrowers has been in this regard.
As advisors to these institutions we have been increasingly relied upon to provide expert advice including independent remortgage valuations.
Sentiment goes a long way in property and if remortgage products address current uncertainty in residential and commercial property, then this can only be a good thing for the market moving forwards.
(Jonathan Lieberman, MRICS, Senior Surveyor)