Landbay: ‘If we think landlords are tax dodging, we won’t lend’

by:
  • 16/01/2018
  • 0
Landbay: ‘If we think landlords are tax dodging, we won’t lend’
Landbay is likely to turn down landlords who are reluctant to share their tax details, chief executive John Goodall has revealed to Specialist Lending Solutions.

Goodall (pictured) also noted that brokers who aimed to provide the best experience possible for their customers were typically the best to work with.

Where taxation is concerned, the specialist lender now asks for slightly more information following last year’s introduction of the Prudential Regulation Authority (PRA) rules on portfolio lending – but has long required landlord’s SA302 forms, proving tax and income.

He told Specialist Lending Solutions that questions are raised when a landlord does not want to share their tax documents.

But he added that brokers Landbay works with generally expect the questions and information requirements that come from the lender.

For example, if the rental level is significantly different to the market, it will ask why.

It could be the landlord is getting a cash top-up or they have good tenants and have not raised rents for a number of years, Goodall said.

But he added: “If we think you’re tax dodging, we’re not going to lend to you.”

Buy-to-let not going anywhere

Despite a raft of regulation and tax changes portfolio lending will continue to be a big theme this year, according to the Landbay chief.

He expects a rush of remortgage activity in the first half of year, ahead of the two-year anniversary of the introduction of additional stamp duty for landlords and property investors.

The purchase market may continue to be subdued, but Goodall is not too concerned about the long-term health of buy-to-let.

He said: “There will always be a churn. Because of the tax changes there will be some who decide to reduce or pull-out their portfolio, but there will still be other people entering the market or growing their portfolio.

“The overall stock of properties in buy-to-let I don’t think is going to shrink. We’re a growing population, so the demand for rental accommodation is going to increase.”

He added: “The world has changed in the last 18 months, as far as buy-to-let is concerned.

“All buy to let is now specialist – things that used to be vanilla, no longer are.

“And that means mortgage brokers need to educate themselves about specialist lenders – so they can serve their clients well.”

 

New products

The lender hopes to bring out new offerings over the course of the year, following the introduction of buy-to-let for first-time buyers.

Many of Landbay’s changes come from conversations with brokers who point to gaps or demand in the market, Goodall said.

Some brokers are better to work with than others, the chief executive admitted.

Those who are easier, tend to be the intermediaries that are very focussed on their users’ experience.

He said: “Those organisations that invest in that technology and mind-set – they’re generally the ones that it’s easier to do business with and probably provide a better outcome for their clients.”

 

Mortgage market must invest in technology

Overall Goodall thinks the industry needs to invest more in technology, as better firms tend to go hand-in-hand with good systems.

And this includes Landbay. The chief executive wants to improve the lender’s technology and user experience for brokers, as well as speeding the process up – eventually getting to same day offers.

The chief has his eye on becoming a significant alternative to challenger banks.

Landbay benefits from its diversity in funding, but the banks have had access to cheap access to cash through the Bank of England’s Term Funding Scheme (TFS), which is due to end in February.

Goodall said the end of the scheme should level the playing field back in Landbay’s favour.

There are 0 Comment(s)

Comments are closed.

You may also be interested in

Bridging

Keep up-to-date with all the breaking bridging and short-term lending news and analysis, from regulatory changes to product innovation and inside market knowledge. Take a look at our broker and lender case studies showing short-term finance in practice.

Commercial

Find all the news, opinion and analysis for property finance brokers specialising in commercial and semi-commercial mortgages, alternative and development finance for commercial investments in residential projects.

Second charge

Stay up-to-date with the latest news, analysis and opinion on the secured loan market as it evolves into a mainstream finance option following European regulation on 21 March 2016.

Complex buy-to-let

Whether it’s a complicated asset or a complex customer, you’ll find out all the breaking buy-to-let news in this section. From limited companies to portfolio landlords, student lets to a House in Multiple Occupation, we’ve got all bases covered with our up-to-the-minute news, analysis and opinion.

Mortgage Solutions

Find all the breaking news, analysis and industry comment on Specialist Lending Solutions' sister site, Mortgage Solutions
Read previous post:
calculator and pen
Buy-to-let portfolio stress test rates cut by Landbay

The specialist buy-to-let (BTL) mortgage lender Landbday, has announced it is changing its background underlying portfolio stress tests, amending them...

Close