Recent data from HMRC indicates that there are now around 2.65 million property owners in the UK, each grappling with a range of different financial challenges.
From service fees to vacation rentals, a lot happens. Ideally, banks should be in a strong position to support owners on their journey, but…unfortunately, this is rarely the case.
With less and less time for individual service along with more and more regulatory and financial requirements, let’s take a look at where banks need to go. And when the angel needs to get away.
Inspired by a recent conversation I had with experts John Saunders and Conor McDermott of Monument Bank on the Dave and Dharm DeMystify podcast, here are six reasons why landlords should consider switching banks.
- You want more options than just a vanilla mortgage
Unlike most mortgage seekers, landlords and investors have special needs. And all too often, regular financing options don’t solve the problem. If you want more than a vanilla mortgage, look for banks that specialize in buying-to-let and real estate investment services.
What we see from the banks is that they will willingly give you a mortgage if you can afford it, but that’s about it. For access to more specialized and customized financial options such as bridging loans, look away from the mainstream and toward banks designed around real estate investors.
- I’m done with the mountains of paperwork
Increasing outdated, outdated regulations and regulations are a real pain for landlords, especially when deciphering complex, mind-boggling circumstances.
Some investors practically need a pickaxe and a sturdy pair of shoes to climb the mountain of paperwork. However, according to experts, much of this is unnecessary. Choosing a specialized service rather than a public bank means fewer compromises and more customization.
- Are you interested in buying commercial real estate
Leasing a corporate space helps diversify your real estate portfolio and can provide a welcome boost to the local economy.
Investing in warehouses in the UK, for example, saw a record £6 billion boom in 2021, according to research by property consultancy Knight Frank.
What is puzzling, however, is that the current banks are not catching up with this trend despite their increasing popularity. If you are interested in investing in commercial property, but your bank is not making it easy for you, it may be time to look elsewhere.
Over the next year, the markets are expected to stabilize a bit. Some banks are looking to offer commercial real estate loans as a priority. Keep an eye out for these tailor-made solutions, and don’t try to force a square-in-a-hole hook up with a stubborn Main Street bank.
- Want to buy real estate through a merged company
The 2018 English Private Landlord Survey (EPLS), conducted by the Department for Housing, Communities and Local Government (MHCLG), revealed that 6% of UK landlords rent their property as part of a business or organisation. But these owners mean business.
And their needs are not being met by ordinary banking solutions. If you’re thinking of running your property through a incorporated company — and reap the lucrative tax benefits that come with it — you might want to upgrade your bank, too.
- You have more than one feature
Nobody has time to juggle multiple different payments each month. But for landlords who own more than one property, this is the reality.
If your bank expects you to manage several payments on the go each month, it can save you a lot of time and frustration to combine everything in one payment.
- Want to access and apply for loans outside of business hours
In recent years, financial and regulatory technology has developed by leaps and bounds. These days, there’s no reason you should have to queue at a cold, dusty bank waiting for a cashier to do some mundane administrative tasks. And you don’t have to put up with annoying bot calls and their security hurdle cycles.
So, if your bank is causing you stress, look for alternatives. With the right technological service, you should be able to complete tasks faster, no matter what time of day you come in.
Being an owner doesn’t have to mean that you’re tied up for life with horrific automated phone services or more complex circumstances of coding.
About the author
Darmesh Mistry has been in banking for 30 years and has been at the forefront of banking technology and innovation. From the first online and mobile banking applications to artificial intelligence (AI) and virtual reality (VR).
He’s been on both sides of the fence and isn’t afraid to share his opinions.
He is the CEO of AskHomey, which focuses on the families experience, and an investor and mentor in proptech and fintech.
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