The global pandemic affects all of us in different ways and, landlords, like many of us, will be juggling health concerns with financial worries.
They need lenders and brokers to step up and support them throughout this crisis and beyond.
It’s inevitable that some tenants will struggle to pay their rent and the government has already intervened to stop evictions until 24th August and increase notice periods to three months.
What happens after that is unclear.
Landlords need accurate information, reassurance, and advice. And that’s where brokers come in.
Trusted advice
You are best positioned to answer their questions and help your clients understand their next steps. They already trust your expertise and skills in this sector and will be keen to discuss their options with you.
Of course, you need lenders to keep you up to date, so you can be confident in your advice.
Support for landlords has already been announced by the government and by lenders. Buy-to-let borrowers can claim up to three months’ payment holiday and, if necessary, extend that by a further three months. Plus, mortgage lenders have agreed to suspend all repossession orders and not start new court actions until 31st October 2020.
This temporary support is welcome, but landlords will still have plenty of questions.
- Should they take a payment holiday? How will it affect their future payments?
- Will their eligibility to remortgage be affected and, if so, what switching options will they have?
- What happens at the end of the payment holiday? Should they extend it further? Will their repayments increase? What if their tenants still can’t pay their rent?
If you haven’t already started working through your client bank to offer a mortgage review, now’s the time to get started.
Limited products
Of course, not all landlords are financially impacted by Covid-19. Many tenants will continue to pay their rent as normal and landlords will meet their mortgage obligations.
However, those with products maturing in the coming months could still be indirectly affected by the overall restriction in products, especially buy-to-let borrowers with limited equity in their properties. In the early weeks of lockdown many landlord products were pulled from the market.
According to Moneyfacts there were 141 two-year fixed rates and 150 five-year deals up to 80% LTV on 1st March. By 30th April this had fallen to just nine and six, respectively.
For clients without sufficient equity a product transfer will be an option, and BM has just launched a new product transfer range to support existing clients.
Lender commitment
You are not alone supporting your clients. Brokers can rely on strong buy-to-let lenders that remain committed to the landlord market.
The UK mortgage industry is diverse and competitive, with lenders ranging from experienced market leaders within large financial organisations to new, specialist and often non-bank providers.
This leads to fantastic innovation and competition for landlord mortgages, but it’s no secret that some of the specialist non-bank lenders are struggling during the current crisis. Many had to pause new lending temporarily which we hope will not limit choice for your complex buy-to-let clients. Some have been able to resume lending in recent weeks.
For the core market of traditional landlords with modest portfolios and standard requirements, the UK’s largest buy-to-let lenders have moved quickly.
We’ve put remote working practices into place and, now the initial rush of payment holiday enquiries has been managed, many lenders have returned with products and processes that keep the market moving.
At BM we’ve returned to 75 per cent LTV lending with remote valuations. Now property viewings and valuations are allowed in person, we’ll hopefully start to see the purchase market begin to pick up, but product transfers and remortgages are still likely to dominate this year.
We pay a full proc fee to brokers on our new product transfer range, and it’s available to our existing landlords who’ve taken a payment holiday or seen their circumstances change.
Ready to help
At BM, our business development team are fully operational from home making sure our communication channels are open – online and over the phone. We’re even supporting our colleagues in our operations teams who’ve been hardest hit with office-based limitations or the temporary closure of some sites.
We know from talking to brokers that you want clear information, access to our mortgage experts and support for your clients. We’re working hard to continue to give you that.
You need to be able to trust your lender partners. And you can rely on us to deliver competitive products, great service, and leading technology to help you serve your clients, this year and beyond.
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