This, by the way, is not a segway into a piece about the Consumer Duty rules which, of course, are all about positive consumer outcomes, but instead an acknowledgement from a lender that we recognise that this current market environment is not the easiest to traverse for advisers.
For a start, and this is just in the buy-to-let space, there has been a constant to-ing and fro-ing in terms of product choice, availability and criteria. Recent research from Knowledge Bank suggests that during July, of 1,500 criteria updates on its system, almost 40 per cent were in the buy-to-let sector.
And that is just criteria being shifted, let alone what we have seen in terms of pricing as lenders, including ourselves, have sort to marry up meeting ongoing strong demand with maintaining our service levels.
Constant recruitment mode
We would be the first to admit that, due to a combination of factors, we were not able to keep service where we wanted to, which precipitated our decision to reprice and spend the intervening weeks since we did that, working through our significant pipeline.
Hopefully, you will have read recently of our office expansion in both Fleet and Cardiff to house additional human resources within the business, and we – like many lenders – are in constant recruitment mode.
That will not change but as we come to the start of a ‘new school year’, we will have further news to share around products and pricing.
Buy-to-let positivity
One point to make around buy-to-let – a sector which appears to be constantly dismissed by some as on the brink of collapse when it is anything but – is just how positive a year it has been in the sector.
Of course, landlords are having to deal with some major challenges and there are others on the horizon including how they cope with the Section 21 ban plus, of course, meeting the new energy efficiency standards for properties. However, they are an incredibly resilient bunch, and they have an innate capacity to see the wood for the trees when it comes to viewing property as a long-term investment.
For instance, going back to that Knowledge Bank research, the most searched-for criteria in July on buy-to-let was lending to limited companies and which lenders accept first-time landlords.
Again, if buy-to-let is the pariah investment that many believe it to be, why are advisers searching for lenders who accept new landlords? Additionally, most landlords are now utilising limited companies in order to house properties to ensure they are doing so in the most tax-efficient manner.
Clearly, landlords have had a lot to contend with; they do so now with the cost-of-living crisis impacting tenants and themselves – particularly those in the houses of multiple occupation (HMO) sector – who tend to include bills within rents.
Buy-to-let still a viable investment
But fundamentally, as a long-term investment, buy-to-let remains attractive. Hence why we are seeing ongoing demand across both purchase and increasingly remortgage.
I tend to say this again and again, but people need places to live and if you’re unable or unwilling to buy then it is the private rental sector (PRS) which is going to be the only way to go.
Advisers who stay on top of the buy-to-let sector, who understand the market, who can provide advice and support not just on mortgage products but everything else impacting on landlords, will continue to do well in this space.
The sheer fluidity of the sector, of landlord demands and needs, and the options available increasingly require an advice solution – it’s up to you to deliver it.
