Apr 13

Banks u-turn on landlords at risk

The forbidding of new mortgages for landlords letting to tenants on benefits by Nationwide and Lloyds bank has long been a scandal. So the good news for private landlords is that both institutions have announced a u-turn on the policy.

For a state-owned lender (Lloyds) and the UK's biggest building society (Nationwide) to restrict landlords from letting to people who already have very few housing options was described by The Guardian as “bad” so it is perhaps good news for everyone that the restrictions have gone.

Private landlords are now free to apply for a mortgage for this type of rentals, and the speed of the climb down by the banks has been swift with new rules already in play.

Of course, it’s not all good news as landlords have been warned not to rush in to taking on mortgage when new rules on welfare benefits have yet to be proven to be sound.

The Universal Credit system, which the government will be rolling out this month, means that all benefits will be paid directly to a nominated bank account – leading to housing charities to warn of a huge rise in evictions and debt.

Now that these lending restrictions have been lifted it would be a good opportunity for lenders to improve the advice they give to private landlords who let to tenants on benefits.

What do you think? Would you like to see lenders working closer with private landlords? Will you be taking up a Lloyds or Nationwide mortgage now they have relaxed restrictions?

About the author

Eddie Hooker Photograph Eddie Hooker has been involved in the insurance industry since 1985.  He worked with many large insurers such as Legal & General and AXA Insurance prior to setting up his own insurance business, Hamilton Fraser, in 1996.  Hamilton Fraser now employs over 130 staff out of their North London office, dealing with various insurance products for the buy-to-let property market such landlord insurance, rent guarantee insurance, emergency cover and tenancy deposit protection. 

Eddie and Hamilton Fraser Insurance first started to provide landlord insurance as early as 1996 when they became involved with the Small Landlord Association, which later became the National Landlords Association. 

By working closely with the industry’s leading companies Eddie and his team have built up a detailed understanding of the landlord market ensuring that the customer experience is founded on knowledge and support.  This has been highlighted in a recent customer survey that found that 95% of Hamilton Fraser customers were either satisfied or more than satisfied with the service provided by the company.

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