What Landlords Want
Choosing a lender It’s been some time since buy-to-let investors have
chosen banks as their lender of choice. We haven’t had the luxury of being able to choose the big boys because of the shortage of funding. In fact I think it’s the opposite. I think the criteria of the lender drives which we go to. At the moment I’m almost pushed into a corner because there aren’t many lenders who would look at student property for example. Having said that the past year has seen choice improve. Two or three years ago there were only a handful of buy-to-let lenders lending. Landlords now have the luxury of being able to choose lenders on criteria – that’s new. There are definitely more options for landlords investing in more complex properties or deals outside the run of the mill vanilla space.
Rate, criteria or service? All three are important but it does depend on the
situation. Investors usually have quite tight timescales so service and speed is more important for a buy-to- let landlord than it is for a normal first-time buyer. A landlord always wants to get a good deal because they don’t (or shouldn’t) have any emotional attachment to the property. If you go to a slow lender it doesn’t matter if they’ve got the best rate in the world, if you can’t get a mortgage in the first place you can’t buy the property. Speed is as important as rate. If you’re able to mix the two together and are able to have both great service and a good headline rate, that’s ideal. However, we’ve noticed problems when new lenders enter the market and think they can get a good market share on a great
rate but they’ve got poor underwriting or they don’t really understand the buy-to-let market. The short of it is landlords won’t go to them.
Give me a list But it’s not hard for lenders to up their game on service.
Speed and confidence is king. Good service is when a lender asks for something and they give you a shopping list of what they need. If they can give that list up front and there is no further changing of the goal posts (allowing brokers to manage their client’s expectations) that is all we can ask for. The speed from application to offer and the speed of valuation is important too but one of the big things for a landlord is making sure we don’t have to keep digging through paperwork again and again, three or four times before mortgage offer. It slows the process down and it’s extremely annoying from a landlord’s point of view. It’s important to get that list up front.
Aldermore Brokers always want choice and variation from lenders.
Where Aldermore has been particularly interesting recently is by not asking for minimum income. That’s good for full-time property investors who have many different sources of income as it opens up the market a bit. Aldermore has also developed its complex offering and will look at student properties and slightly different criteria. It’s always good to have more lenders in the market and Aldermore appears to want to tackle buy-to- let in a refreshing way.
Interview by Yuan Phoon
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