The outlook for Buy to Let looks bright. In a recent poll of mortgage advisers carried out by Pepper Money, 69% said they expected to see growth in Buy to Let remortgage business in 2021, while only 35% anticipated a drop-off in mortgage purchase activity following the stamp duty holiday.
Mortgage advisers can take some confidence then that there will be continuing demand from their landlord customers. But the research has also offered a word of caution. According to the survey, 82% of mortgage advisers say that service has now become a bigger consideration in their product recommendations. So, why is service becoming a bigger issue in Buy to Let?
Service issues in the wider mortgage market have been well-documented as some lenders have struggled to balance the combination of increased demand and reduced capacity as a result of social distancing and remote working. This has led to substantial delays with some lenders while other lenders have been able to maintain up-to-date turnaround times.
For Buy to Let landlords, who may be competing to purchase a property, or have built business plans around an anticipated completion date, a significant delay in the mortgage process could have a tangible impact on their bottom line.
With this in mind, speed of offer was considered to be the most important element of service for landlord customers amongst 25% of mortgage advisers, while 12% of mortgage advisers said speed of decision was most important. However, it’s not speed that is considered to be most important element, but consistent underwriting. Half of mortgage advisers (50%) cited a consistent approach to underwriting as the most important element of service for their landlord customers.
In the current environment, where there is so much uncertainty, Buy to Let landlords are craving certainty when it comes to the decision-making process so that they know where they stand. This is understandable, but it’s not easy for advisers to research. Whereas there are online platforms that facilitate sourcing on rate, criteria and even affordability, it’s less easy to find out about a lender’s service and approach to underwriting.
Some lenders, like Pepper Money, publish up-to-date service levels on their websites and this can prove an important resource for mortgage advisers. And, of course, lender BDMs can provide mortgage advisers with important insights and information that are not available online – such as, whether the specifics of an individual case are likely to be accepted. In fact, according to the research, 8% of mortgage advisers said that access to BDMs is the most important element of service for their landlord clients.
Buy to Let could offer a rich stream of business this year, and when it comes to sourcing the best lenders for your landlord clients, service is going to be a key consideration. So, stay on top of which lenders are on top of their service levels and make good use of your relationships with lender BDMs.