"The value of the advice process has never been more evident when it comes to helping a variety of homebuyers, landlords and investors in finding the right kind of finance to meet their shifting needs."
As is the case with any investment vehicle, it will inevitably come under constant scrutiny but it’s fair to say that buy-to-let continues to throw shade on the doubters. And its solid foundations and robust nature will carry on making this an attractive proposition for domestic and overseas investors for the foreseeable future.
Turning our attention to the BTL market from an intermediary perspective, we have seen a raft of positive data as lenders are becoming increasingly active and landlords are taking advantage of some favourable conditions.
When it comes to products, the number of buy-to-let mortgage products has started to increase following recent lows. According to the latest data from Moneyfacts, June and July saw 283 more products added to lenders’ ranges. At the time of this report, there were said to be 134 more two-year fixed products available in the buy-to-let sector than there were at the start of May 2020, and 164 more five-year fixed rate products on offer. Average rates remain competitive, especially when compared to January of this year. The average rate for two-year fixed rate mortgages on 1st July was 0.21% less than at the start of this year, while the five-year fixed rate has fallen by 0.22% over the same period. To maintain some degree of perspective, the overall market is still far below the levels seen in January (2,583 products available) and March (2,897).
In addition, Mortgage Brain recently suggested that the number of European Standardised Information Sheets (ESIS) generated through its sourcing systems has reached pre-pandemic levels. At the time of writing, buy-to-let purchase ESIS were reported to be 7% higher than before Covid-19.
However, it’s not all plain sailing for borrowers and intermediaries. Research from online broker forum, Cherry, outlined that almost half of intermediaries are currently finding it difficult to place some specialist cases. In its June poll – which focused on highlighting the types of cases which intermediaries are finding the most difficult to place – 45% of respondents indicated that self-employed cases are the most difficult to place in the current lending environment. This was followed by high LTV cases (34%), cases where the applicant is on furlough (12%) and cases where the applicant has taken a mortgage payment holiday (5%). ‘Other’ made up the final 4%, with respondents pointing to adverse and buy-to-let HMO as being the most difficult cases to find a home for.
This data points to a healthy buy-to-let market. However, as indicated in the Cherry survey, it’s not straightforward for some borrowers and the value of the advice process has never been more evident when it comes to helping a variety of homebuyers, landlords and investors in finding the right kind of finance to meet their shifting needs. With demand continuing to grow, proactive intermediaries can look forward to an even busier summer than previously anticipated.
