Expert discusses quick turnarounds, affordability and more
In today’s challenging climate, broker expertise has never been so important as landlords look to navigate the buy-to-let arena while rates rise and EPC regulations loom.
While rates will always remain important, especially in today’s market, there are other factors for brokers to consider when choosing the right lending partner for their clients: such as ease of application, speed, communication and overall service.
So, what is of most importance for brokers when looking for a buy-to-let lender for their client?
How important is product and affordability in the buy-to-let market?
Paul Brett (pictured), managing director, intermediaries, at Landbay, said a key consideration must be product range - whether to support the purchase of a new investment property or, increasingly, to remortgage an existing asset.
This year, Brett added, has seen high levels of mortgage maturity in the buy-to-let market and it shows no signs of slowing down.
“While this presents an opportunity for brokers, it is also a clear challenge as many landlords inevitably face higher rates than before and tighter affordability as a result,” he said.
Whether it is stricter stress tests in response to higher rates, varying criteria or income and deposit requirements among lenders, Brett said, a product range that is alive to the challenges facing landlords is absolutely essential. Prioritising a lender, he added, that can offer a variable fee structure can be a good way to find products and rates that still work in difficult circumstances.
“Beyond variable fees, lenders have been playing their part in recent months, not just in bringing new products to market, but also trimming rates as swap rates stabilise,” he said.
How important is technology in the buy-to-let space?
The volatility around products seen earlier this year, Brett said, is also a reminder that brokers should prioritise technology-focused lenders, particularly those with their own in-house portals.
“The product withdrawals seen in the market was partly caused by volatile rates, but also by hefty turnaround times as many lenders were forced to rely on external technology providers to make system changes,” he said.
By utilising an in-house system, Brett said, lenders can make changes at pace and react to the market, whether it is tweaking rates and lending criteria, launching new products, or increasing system functionality.
In a market in which timing can make or break a deal, Brett said, the ability to not only change, but create products in hours instead of days is hugely valuable.
“As we continue to see greater stability in the wider market and lenders gain that extra breathing space to review products and pricing, this will only play a bigger role,” he added.
How important are quick turnarounds in the buy-to-let arena?
In a similar vein, Brett said the speed in which a lender can turn around cases should be a priority for brokers.
“As such, efficient processes, quick decision making, strong communication both internally and externally, and flawless execution are all key attributes to look for in a lender,” he said.
Technology, Brett said, can once again play a pivotal role here, providing greater efficiencies when submitting a case, but also through underwriting, survey and valuation.
“Given the many obstacles facing both new and existing landlords, particularly in the current climate, brokers are keeping up their end of the deal and acting with real urgency; in reality, both brokers and their clients should expect nothing less from lenders too,” he said.
What do you believe brokers should be looking for in a buy-to-let lender for their client? Let us know in the comment section below.
