Opportunities for 2018: ‘There are plenty of lenders out there happy to lend past 65’

Analysis by Standard & Poor’s (S&P) found the rising number of borrowers reaching deal-term end with no means of repayment was highest among the self-employed, those over 55 years old and self-certified customers.

However, many lenders have increased the age limit they are willing to lend to and Jannels said lenders are failing to inform struggling borrowers.

“When those letters land what they don’t say is that there are plenty of lenders who will lend to over 65s and also that they can cope with other issues like a credit blip,” said Jannels.

The research, by credit ratings giant S&P in December, examined £15.2bn worth of loans in 84 residential mortgage-backed securities.
It found 36% of borrowers with loans due to mature between January 2016 and June this year failed to pay off the capital lump sum required at the end of the mortgage.

Interesting times for buy to let

On buy to let, Q1 marks the beginning of the two-year remortgage maturities bonanza after the 1 April 2016 stamp duty surcharge deadline, which brokers should be working to capitalise on, said David Whittaker, CEO of Mortgages for Business.

“This was before any of the stress test rules came into force and the right to remortgage felt like a god-given right. Things will have changed and portfolio landlords in particular may struggle with the new stress tests,” he added.

He also said another uncomfortable task that falls to brokers to flag is that from the 1 April 2018, landlords will be obliged to hold an Energy Performance Certificate (EPC) rating the property higher than F or G for each property.

“Without one, landlords can’t let to a new tenant after April and can only keep an old tenant in until the 1 April 2020,” he said.

Refuse to lend

Whittaker noted that new technology from providers such as EDM and Etech means lenders will have access to databases of this information and may refuse to lend on properties without an EPC post-deadline.

“These are uncomfortable messages but if managed well can lead to good outcomes with the surge in EPC activity ahead,” said Whittaker.

Simon Allen director from commercial broker Searchlight added: “I think this year is going to be very big on refurbishment finance, with all the EPC changes kicking-in soon, so people will have to refurbish property, and also as more people are still going for HMOs for the higher yields.

“So I’d like to see more BTL lenders returning to traditional refurbishment lending,” he added.