We now sit on an upward curve of mortgage rate rises which looks set to be consistent for 2022. Landlords are not only battling this but also a tightening of the lending criteria. What does this mean for landlords and how can landlords mitigate the impact of the current financial climate? 

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A recent article quoted Mel Whiting of Norton Finance who cited that Landlords were not only facing the knock effects of rate rises but also, a change in approach to how affordability is assessed. 

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A key change to lending criteria is how lenders are assessing affordability. Now, lenders are looking for separate income to cover any potential void period, or the rental income to be 120% - 140% of the mortgage payment.

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Whiting also refers to a much longer application processing time in the region of 3 - 4 months and advises Landlords to allow for this now we operate in a world of hybrid working.

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‍How can Landlords mitigate this? 

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Given the changes to lending criteria and increasing mortgage rates, beating the market when it comes to income and overall return is key for landlords.

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At Lyvly, we generate income and returns far in excess of the market norm, meaning our landlords are able to mitigate the impacts of tightening lending criteria and either hold on to or expand their portfolios. 

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It was recently reported that 20% of landlords in London are considering exiting the market entirely. We can speculate that changing lending criteria is a key factor to the environment becoming less attractive to many. 

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We are working with landlords who need to earn more and reduce the risk of vacant periods, which as the lending climate changes become more of a concern. Our average tenancy length is 19 months and average vacancy period between tenancies is 3 days - ultimately, we reduce stress for landlords. 

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If you’re a landlord worried about your current rental income and void pattern, contact Lyvly to find out how we can smooth the path for you with the evolving lending climate, or book a valuation with Lyvly here and see how much more you could be earning. 

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We’ll be keeping our eyes on the market for all further updates on this, so check back to the Lyvly blog weekly, or drop us your details at www.lyvly.uk/landlords to be the first to receive updates from Lyvly. 

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