Following the changes to Buy-To-Let mortgage requirements since Government(UK) and PRA changes have come into effect, there was much expectation that the number of private BTL landlords might dwindle. So far, that hasn’t been the case. However, when it comes to BTL mortgages, brokers have a few things to say on the new regime.
A recent survey by Precise Mortgages identifies two specific areas where mortgage brokers see room for improvement with regards BTL products:
“BTL mortgages are now subject to tougher criteria, even though there is a wider choice of product on the market – 1,498 in February, up from 1,357 in January,” said Assetgrove, Rent Guaranteed Specialists. “But, rather than looking for things to go back to the way they were, brokers are looking forward and want to embrace change – provided its positive, understandable and serves a purpose.”
Innovation and consistency
The details of the Precise Mortgage survey show that some 50% of BTL mortgage broker respondents said they wanted to see more innovative products on offer, particularly from specialist BTL mortgage providers.
Meanwhile, 43% said they felt more consistency over requirements and criteria would be of benefit to BTL mortgage applicants.
In addition to those two details, more support for remortgaging in the BTL industry was also identified as being something BTL mortgagees would appreciate and benefit from.
“With many BTL investors still digesting and understanding the implications of the new BTL-related mortgage lending rules, some additional support, ingenuity and standardisation from the BTL mortgage industry could be a real help to lenders and the private rental sector,” said Andrew Reeves
Brokers seen more prominent in BTL mortgage industry
Separately, Mortgage Strategy interviewed a number of BTL mortgage brokers on how they felt the PRA BTL mortgage changes had affected the market.
On the whole, it appears that there hasn’t been much notable change in the volumes of BTL mortgages brokers are processing. That’s something that’s borne out in the latest mortgage lending trends survey from UK Finance which shows there were 5,300 new BTL mortgage loans approved in December, 5,600 in January and 5,200 in February.
However, one view that was consistent with the Precise Mortgage survey is that the new, more complex BTL mortgage rules have paved the way for specialist BTL mortgage brokers to dominate the industry and help borrowers find the right product to suit their needs and circumstances.
BTL landlords don’t want to fall foul of the ne rules but they also want to be able to navigate them correctly and quickly. That’s the kind of service good specialist BTL mortgage brokers should be able to offer a broad section of borrowers.
“Taking the decision to remain in the BTL business isn’t something most landlords have taken lightly and BTL brokers should work to help support those who have decided to stay put and provide private rental homes to a still under-provisioned proportion of households,” said Eden Harper. “It won’t only work out well for the landlords, but also the brokers themselves – they’ll build a reputation as the go-to broker for their region and stay busy, contrary to expectations the opposite might happen.”