Landbay: ‘If we think landlords are tax dodging, we won’t lend’

Goodall (pictured) also noted that brokers who aimed to provide the best experience possible for their customers were typically the best to work with.

Where taxation is concerned, the specialist lender now asks for slightly more information following last year’s introduction of the Prudential Regulation Authority (PRA) rules on portfolio lending – but has long required landlord’s SA302 forms, proving tax and income.

He told Specialist Lending Solutions that questions are raised when a landlord does not want to share their tax documents.

But he added that brokers Landbay works with generally expect the questions and information requirements that come from the lender.

For example, if the rental level is significantly different to the market, it will ask why.

It could be the landlord is getting a cash top-up or they have good tenants and have not raised rents for a number of years, Goodall said.

But he added: “If we think you’re tax dodging, we’re not going to lend to you.”

Buy-to-let not going anywhere

Despite a raft of regulation and tax changes portfolio lending will continue to be a big theme this year, according to the Landbay chief.

He expects a rush of remortgage activity in the first half of year, ahead of the two-year anniversary of the introduction of additional stamp duty for landlords and property investors.

The purchase market may continue to be subdued, but Goodall is not too concerned about the long-term health of buy-to-let.

He said: “There will always be a churn. Because of the tax changes there will be some who decide to reduce or pull-out their portfolio, but there will still be other people entering the market or growing their portfolio.

“The overall stock of properties in buy-to-let I don’t think is going to shrink. We’re a growing population, so the demand for rental accommodation is going to increase.”

He added: “The world has changed in the last 18 months, as far as buy-to-let is concerned.

“All buy to let is now specialist – things that used to be vanilla, no longer are.

“And that means mortgage brokers need to educate themselves about specialist lenders – so they can serve their clients well.”

New products

The lender hopes to bring out new offerings over the course of the year, following the introduction of buy-to-let for first-time buyers.

Many of Landbay’s changes come from conversations with brokers who point to gaps or demand in the market, Goodall said.

Some brokers are better to work with than others, the chief executive admitted.

Those who are easier, tend to be the intermediaries that are very focussed on their users’ experience.

He said: “Those organisations that invest in that technology and mind-set – they’re generally the ones that it’s easier to do business with and probably provide a better outcome for their clients.”

Mortgage market must invest in technology

Overall Goodall thinks the industry needs to invest more in technology, as better firms tend to go hand-in-hand with good systems.

And this includes Landbay. The chief executive wants to improve the lender’s technology and user experience for brokers, as well as speeding the process up – eventually getting to same day offers.

The chief has his eye on becoming a significant alternative to challenger banks.

Landbay benefits from its diversity in funding, but the banks have had access to cheap access to cash through the Bank of England’s Term Funding Scheme (TFS), which is due to end in February.

Goodall said the end of the scheme should level the playing field back in Landbay’s favour.