‘I'm a mortgage expert – buy-to-let is dead and buried’

In the wake of Kwasi Kwarteng’s “mini-Budget” I watched my brokerage company’s turnover drop by 80pc in a few hair-raising weeks. I admit, I was one of those wondering if the mortgage market turmoil was an extinction-level event for the sector.

Lending rates soon hit 5pc, buy-to-let rates went to 6pc and specialist lenders were knocking on the door of 10pc.

Thankfully, the new year has seen some stability.

Committed buyers are still there and chains are holding firm and transactions are completing. The housing market is catching its breath.

But there is something hiding in plain sight, it is the elephant in the room; the smoking gun: buy-to-let. The last buy-to-let purchase we did was on Oct 14th. What once may have accounted for 20pc of our business is now suddenly rarer than a housing minister with more than 6 months on their CV.

If you are thinking of entering the buy-to-let market in London you will probably need a 50pc deposit to even start the conversation with a mortgage lender. Throw in additional stamp duty, EPC certification and a raft of legislation and regulation and then suddenly Bitcoin might start to look like a more stable bet.

If you are already a landlord and you have a mortgage that is due to reset at some point this year, you might want to think about getting a mortgage broker (or maybe a counsellor) on speed dial. What was once a profitable business has rapidly become break even at best, and for many, loss making overnight.

It is not uncommon to see the mortgage payments for investment properties now remortgage from low rates of 1.5pc to be met with rates starting at 5pc. Furthermore, lenders’ background “stress tests” are now hammering nails into coffins so hard it is drowning out landlords’ calls for help.

Whether it is a house to live in or a place to rent out, we are talking about the homes of millions of families and individuals across the country. There is a huge systemic shock building up due to the Bank Rate moving from 0.1pc to 4pc in a little over 12 months.

So, to those of you with your fingers on the trigger, I say this: erring on the side of caution might actually help save the day and with it, the finances of millions of people.

Martin Stewart is the founder of London Money, a mortgage brokerage