This is not just about residential remortgaging, which (even with base rate increases) is likely to remain highly competitive for the short to medium-term, but also one suspects in the first part of 2018 the buy-to-let remortgage market.
Cast your minds back to two years ago, and the significant spike in buy-to-let purchase activity that occurred after the announcement was made to increase stamp duty charges for additional properties.
For those landlords who opted for two-year deals, we are shortly heading into prime remortgage territory, whether they purchased individually or via a limited company vehicle.
Given the rather damp buy-to-let purchase market – which is not forecast to change too much over the next couple of years – you would hope advisers would be keen to secure as much remortgage business as possible during this period.
Different mindset
Of course, 24 months is a long time in this market, and there have been significant governmental and regulatory interventions in the buy-to-let sector during that period.
The landlords you dealt with two years ago might well have a very different mindset to back then, particularly if they are individual amateur landlords who felt they had to purchase in order to beat the stamp duty hike but have found the environment rather more challenging since.
This will be even more acute for them in future years as the amount of mortgage interest tax relief they can secure begins to drop further down to the basic level.
For those who opted to purchase via a limited company vehicle there will be other issues to tackle, not all negative it has to be said.
For instance, as this becomes a far more normalised route to purchase, and hold, property then the range of lenders and products available will grow.
Already we’re seeing buy-to-let lenders that, in the recent past, would not have entertained limited company lending now coming to market as they recognise this is where the growth is at.
Professional amateurs
On top of this, you may also be dealing with landlords who find themselves professionalised for the first time.
Not for anything they’ve specifically done but because they now meet the Prudential Regulation Authority’s new definition of a portfolio landlord – although we also know that the interpretation of this new rule differs greatly between lenders with some even taking into account the landlord’s own main residence.
So, again advisers will need to be diligent with such clients. They will also need to introduce them to what is potentially a much more complex lending environment with far greater paperwork required across their entire portfolio, not just the property in question.
However, being able to provide a quality service to portfolio landlords will clearly be of real benefit to advisers, especially when you add in the other services that should also accompany the mortgage, such as insurances.
It has to be said that those who remain around the buy-to-let market now are likely to be the ones destined to stay the course and see their investment as a long-term one.
Having these types of clients on the books can of course reap real dividends. It makes sense to ensure those you serviced two years ago are fully aware of your ability to service them now, what you can offer on the mortgage advice front but also the range of products available right across the piece.
In the face of increased competition, 2018 is definitely the year to hold onto those clients that are likely to be with you for many years to come.
