Cover
demand and are scurrying to beef up the sector. Figures from
MoneySupermarket show that the number of products in the market is creeping up and breaking 12-month highs at favourable rates and LTVs from previous peaks indicating greater competition in the market. “The problems facing first-time buyers have already seen more leaving it later to get on the ladder and a consequent need to rent for longer,” says David Hollingworth, associate director, communications at London & Country. “Buy-to-let has therefore held up much more strongly than anticipated and the increased demand has meant that rental income has increased, ensuring property remains a popular investment choice.
“Clearly that leads to a continued opportunity for lenders and brokers alike with landlords eager to shop around for the best deal. More lenders
“Over the past five quarters, 45% of landlords declared they have seen tenant demand either growing or booming. This is far higher than the previous five-month average”
have therefore shown an appetite for buy-to-let business, attracted by the margin available without having to push too far up the risk curve.” Managing director of Prolific Mortgage Finance Lea Karasavvas said he noticed a much improved variety of products since Abbey for Intermediaries
returned to the buy-to-let market. “Abbey returned equipped with an armoury of excellent rates and flat fees with excellent levels of service. This has pushed other lenders on to compete. Accord’s return to the market also showed that this is a part of the mortgage market that looks set to grow in 2012.”
As the gold rush for buy-to-let happens there is a fact that should strike every broker. Beneath each landlord are tenants who would otherwise be potential homeowners, especially so in the case of reluctant renters. This distillation of consumers is compounded further when multi-unit blocks come into play. A buy-to-let mortgage affords accommodation to many more people than a residential mortgage. If Britain turns into a nation of renters it will mean fewer mortgages and possibly fewer brokers. Brokers need to find a way to
“A clear, focused busi- ness strategy would in- volve trying to contact landlord customers because there is clear evidence that more landlords are looking to increase their port- folios from information we’ve gathered. Work with landlords, lettings agents and estate agents and build a business plan in conjunction with them to support mortgage needs of landlords.”
Andy Young, chief executive at Cardiff-based TBMC
“When you consider how trends have changed from home ownership to renting, it’s important to con- sider why. As brokers we can help by finding a common ground. Talk to clients and delve deeper into their long and short term aims. It could be flexibility which is important to them. If we understand their aims and desires, we can be best placed to assist them.”
Stuart Gregory, director at Lymington-based Lentune Mortgage Consultancy
32 MORTGAGE INTRODUCER APRIL 2012
“People aspire to own a property now who will have to wait but this does not mean that there is a shift in per- spective, just a shift in the timing. Even if renting was the new focus, mortgage bro- kers will thrive due to the enhanced need for buy-to-let mortgages. These require a broker even more because not all lenders in this sector take direct applications.”
David Sheppard, managing director at London-based Perception Finance
“One would hope that the broker community is very much looking at doing business with landlords and as we’ve all seen, buy-to-let business is increasing. Now is the time for those who are renting to look at their options. Brokers should recom- mend they start saving. It may be that there are more people rent- ing for longer but I still think the ultimate goal is to purchase.”
Sally Laker,
managing director of Bournemouth-based Mortgage Intelligence
“Many buy-to-let lend- ers prefer to do busi- ness via the intermedi- ary route. The increase in demand is good news for brokers but if they are to take ad- vantage of the situation they need to take time to research the market, understand lending criteria and the needs of residential property investors. Those not confident in this space should align themselves with a specialist.”
David Whittaker, managing director of Kent-based
Mortgages for Business
www.mortgageintroducer.com
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