Indeed, on Specialist Lending Solutions, the top dozen or so news stories all seem to cover various lenders doing exactly that, including Fleet I might add, as we respond, react and lead the market.
Clearly, that is good news for both advisers and their landlord clients, whether they are individual borrowers, those investing through limited companies, or those opting for houses in multiple occupation (HMO) or multi-unit blocks. You might truthfully say that borrowers of all kinds have perhaps never been so well-served in terms of competitive products.
There are, of course, some key drivers fuelling this lender activity, not least the fact we are coming to the end of the partial stamp duty holiday, and despite there being three months of the year left, the end of 2021 is in sight which means there is often a renewed focus on target-hitting.
Many will be wondering, ‘What happens next?’ in terms of activity levels, with some suggestions that we’ll see a major ‘cliff edge’ in terms of transaction numbers.
Certainly, July’s transactions fell significantly compared to June, but you would undoubtedly expect this, and the first half of 2021 has been very positive in terms of total number of transactions. Plus, the drivers of the buy-to-let sector remain incredibly strong.
In terms of buy-to-let activity, landlords wanting to purchase will have known for some time that they will have needed to set any pre-September transaction in train a good while ago. Anyone active in recent weeks must have factored in the return to stamp duty normality, and these recent product rates and criteria changes are focused fully on those landlords who will purchase or refinance post-September.
The last quarter of the year will be interesting to track because of this stamp duty shift, but we’re also acutely aware that landlords view investments over a long-time horizon.
They will be factoring in the increased stamp duty costs, and in some way looking to offset that by accessing strong mortgage rates, and products which are competitive in terms of fees.
Providing good service
However, we also know that price and fee are just two parts of the overall recommendation of a product and, by definition, a lender to process them.
In this market and specifically in this sector, business does not simply land in your lap just by dint of you existing. None of us buy-to-let lenders should think we have any sort of God-given right to your business and we’re acutely aware that this is a sector which is not solely about price.
If it was, lenders who hit the top of the best buy lists would secure the business regardless of their service offering.
And that, for us, remains one of the key driving factors of being successful in this sector. Service levels and a continued commitment to keeping those levels market leading.
If you’re an adviser confronted with a choice between two lenders, one of which is taking 20 days to open its post, let alone review its documents, provide a decision in principle (DIP) review or a valuation turnaround, then where are you going to place that client, even if the rate is slightly cheaper, the poor service takes that choice out of the equation.
Or, at least, it should.
Providing total certainty to advisers and their landlord clients has to be a priority and those that can marry up both cost and service efficiencies are likely to do well for their partners in the months and years ahead.