You are here: Home - News -

Buy To Let Market Forum 2018: Top slicing is the ‘devil’s spawn’ – David Whittaker

  • 18/04/2018
  • 0
Top slicing in landlord mortgages is a destructive trend that could store up bigger problems for the future, David Whittaker, chief executive of Keystone Property Finance and Mortgages for Business, told delegates at the Mortgage Solutions Buy To Let Market Forum in Manchester.  


Allowing buy-to-let investors to use non-rental income to meet affordability is taking a short-term view of the market, according to Whittaker.

In a keynote speech at the forum yesterday, he said: “I think top slicing in buy-t-let mortgages is the devil’s spawn, because what happens when borrowers get to their fourth property and they move into the portfolio environment?

“They cannot move upwards, downwards or sideways because they’re over geared and they’re over stressed and they can’t get the next property.

“No matter how much deposit they choose to put into it – because you’ve got a portfolio that’s too highly rigged and if you’ve got early repayment charges on the product, you can’t get them out of their existing debt arrangements.

“So try to think over the horizon.”

Whittaker acknowledged the buy-to-let market is still adapting to regulatory and tax changes, as the ground continues to shift.

He said: “The only constant is change and yet more change.”

But it’s now up to brokers to guide investors through the upheavals, according to Whittaker.

He added: “Our job is to make sure that we can help landlords stay on the journey.”


Downward trend but opportunity ahead


In a sobering outlook, Whittaker said the market is currently on a downward trend, and predicted buy-to-let activity would contract further over the next couple of years, but there is light at the end of the tunnel for advisers.

Part of the current decline is driven by an increasing trend for landlords to opt for five-year, rather than two-year fixed-rates, pushing down frequency of client activity.

And some landlords are reacting to increased difficulties in the market by selling up, according to Whittaker.

This could continue as many landlords have not “fully grasped” the impact of changes, especially in relation to mortgage interest relief.

However, a market in a state of flux shouldn’t put off advisers.

Whittaker said: “Out of all this change there’s always an opportunity both for lenders and brokers to grow.

“If you get it right, you can be the winner.

“Brokers do well, as do specialist lenders, when there’s change. When it’s a level playing field, it’s then just a pricing fight.”

And, after 2019, the market will pick up again, Whittaker predicted.

He said: “We’re still settling down into this new world.”

Product transfers are set to be a big part of the new landscape, as well  as limited company borrowing, which could make up as much as 40% of the market by 2019, according to Whittaker.

He added: “It matters that you get on board that particular bus.”

There are 0 Comment(s)

You may also be interested in

Business Skills

In this section, we offer short ‘how to’ guides on harder to crack areas of business. From social media, to regulation or niche product areas, we cover it all.


Our journalists interview key industry entrepreneurs, strategists and commentators for day-to-day market insight and a strategic view of where the industry is heading. We offer lessons for success and explore the opportunities for your business

Success in Practice

Here, we share case studies fleshing out best practice to help you decide what could work for your business. Take a look at how others approached complex tasks like launching a new mortgage lender, advising on a new product area or deciding to specialise in another. Learn from others mistakes and triumphs.


Each week, we ask top mortgage and property commentators with a unique perspective to examine a key news headline, market move or regulatory or political issue.


Vote in our weekly poll here. It’s your chance to tell us what you think and be heard on the top news stories of the week. Review our archive to find out what your industry really thinks and all our coverage of the results.

Top Comments

Be part of the conversation on Mortgage Solutions. We want to hear from you. We have a tool called Disqus to tell us which stories get the most comments each week. Every Friday, the team picks the most thoughtful or opinionated contributions from our readers to enjoy again. Don’t forget to share your favourite stories from the site on social media to keep the conversation going.
Read previous post:
House price growth slows as London values fall – ONS

Annual house price growth dropped to 4.4% in February, down from 4.7% the month before, the latest house price index...