Specialist buy-to-let mortgage brokers are missing out on £21bn of purchase and remortgage loans for landlords according to research conducted by The Mortgage Lender.
The lender’s research, carried out among a panel of landlords for a special report ‘Buy to Let: The Landlord Experience’, asked those who use mortgages to fund their buy-to-let investments how they access advice on their borrowing.
It revealed only four out of 10 consult a specialist buy-to-let adviser, three out of 10 use a general mortgage broker and a quarter search for suitable lenders themselves.
The Intermediary Mortgage Lenders Association estimates buy-to-let lending for purchases and remortgages will be £36bn in 2019, which means brokers are missing out on six out of 10 (£21.6bn) buy-to-let mortgage transactions.
Peter Beaumont (pictured), The Mortgage Lender deputy chief executive, said: “The buy-to-let market has undergone so many changes over the last few years that it is only specialist brokers, who understand all of those changes, the impact on different funding options and the criteria of different lenders, that have the knowledge to help landlords secure the most appropriate funding for their investment.
“But that message isn’t getting through to the majority of landlords who are choosing to either do it themselves or consult an adviser that, by their own admission, is not a specialist. That means brokers are missing out on millions in procuration fees by not adequately getting the message across that their knowledge and experience can add value to the mortgage process for landlords.”
The research also found that only one in eight landlords consult a specialist tax adviser for help on their buy-to-let investments while one in two do it themselves.
Beaumont added: “It’s clear from our research that some landlords aren’t getting the advice they need to manage their investments in the most cost effective and tax efficient way. And, as the full impact of the changes to mortgage interest relief are felt over the next couple of years, landlords could find themselves on the wrong side of the taxman..”