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Top-slicing and let to buy unexplored opportunities for BTL lenders, say brokers

by: Mortgage Solutions
  • 23/05/2022
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Retention, top-slicing, let to buy and modern methods of construction emerged as some of the product gaps brokers urge lenders to fill in the buy-to-let market, during an industry video debate on the shape of the market.

During the discussion, supported by Accord Mortgages, Liz Syms, owner, Connect Mortgages and network and Connect for Intermediaries reflected that despite a varied product universe on buy to let (BTL), there are still product gaps to be explored.

“There are a couple of areas. One is retention in the BTL space. Some refurbishment products allow a bridge first then a refinance onto a term, but there are less products now than historically, which allow a term from day one on a property that requires some refurbishment, but have a retention for the cost of that work.”

She added: “If a lender could offer a product that offers a retention, the client has the guaranteed exit without the cost of a bridge.”

Syms also said that financing for modern methods of construction (MMC) is available from developers but still not on the mainstream mortgage side despite the importance of the green agenda.

Greg Cunnington, chief operating officer at LDNFinance noted that Accord had made some positive changes to its interest coverage ratio, which will help on affordability, and added that although Clydesdale and Barclays were doing ‘top-slicing really well’ more lenders still needed to offer a pure top-slicing model.

He said: “A lot of lenders are doing very similar things at the moment but lenders could try doing something unique and marketed as their own. In one example, we’re seeing a lot more let to buys for those looking to go chain free – you get stamp duty refunded if you sell in the first three years.

This is the first in a series of four buy-to-let debates with panellists Jeremy Duncombe, managing director at Accord Mortgages, Liz Syms, owner, Connect Mortgages and network, Connect for Intermediaries and Greg Cunnington, chief operating officer, LDNFinance and hosted by Victoria Hartley, group editor at Mortgage Solutions.

Part two of the buy-to-let debate series is set to go live on Wednesday 25th May.


Sponsored content created on behalf of Accord Mortgages. For intermediary use only.




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