There is a shortage of suitable advice in the buy-to-let market, according to those attending the Mortgage Solutions Power Hour.
Speaking at the round table discussion, David Humphreys, director of BuyToLet.com, said: ‘There are thousands of people going into buy to let who do not understand it and there are a very limited number of people who do. Investors can access hundreds of thousands of pounds very quickly.
‘They invest the money, but five years later there are repair bills, refit bills ‘ the product needs to be kept up to date. The estate agent is not concerned, the lender is not concerned and the mortgage broker is not concerned.’
He added that more stringent checks need to be imposed by lenders to assess whether an investor has received adequate buy-to-let advice.
‘There is no check made by the lender to see whether the borrower has taken experienced advice, and you cannot say that every mortgage broker in the country is capable of advising on buy to let,’ he said.
Mark Harris, director at Savills Private Finance, also speaking at Power Hour, believes there is product advice available to investors, but there is a lack of advice on which properties to buy.
He said: ‘Brokers are capable of advising on the mortgage and offering a range of products, but there isn’t a body of people who, while they have no mortgage knowledge, have a good understanding of property and the things to look at. I think the onus is on the investor to do the research themselves.’
However, Roger Hillier, product development manager at Mortgage Express, believes there is no need for such specialist advice.
He said: ‘There is a lot of information on property and property investment. There is no central body which tells investors where to buy ‘ but this is not necessary.’
However, Harris believes the onus could eventually return to the broker ‘ not to give advice on whether a property is a sound investment because brokers are not qualified to do this ‘ but to assess a client’s situation.
‘More emphasis needs to be placed on the client’s situation. Do they have £20,000 on deposit to cover any problems? This is why the buy-to-let market has to be regulated. It has to be brought in line,’ he said.
However, Sally Laker, managing director at Mortgage Intelligence, said there is not a problem with the advice already being offered to investors.
‘We have a core of brokers who actually specialise in buy to let and do no other business,’ she said. ‘Most of these brokers have clients that have quite a vast portfolio of properties and they started those clients off in buy to let. Some of them have 30 to 40 properties now.’