Foundation Home Loans (FHL) has warned that brokers could find themselves short of new business now that that the buy-to-let market is entering a short but significant hiatus period, while lenders and brokers concentrate on ensuring completion of existing loans before the Stamp Duty deadline.
Simon Bayley, FHL’s commercial director, says the firm’s analysis of market activity, shows that a period of assessment or reassessment is taking place as existing landlords, as well as those who have been considering buy-to-let investment, decide on their next move.
Bayley argues that the market is currently very busy ensuring existing business completes on time; however as any new funding on property purchased from this point will attract the new stamp duty rates, he feels there could be a danger that new business might be ignored.
He said: “There is a real danger that focus for brokers has switched from business acquisition to business completion during this period. Of course, completing existing loans to beat the stamp duty deadline is important, however I would urge advisers not to lose sight of generating new business.
“Landlords, both experienced and new, have had time to assess and calculate the effect of taxation changes and SDLT and, from what I can see, are ready to buy where they can see capital appreciation and/or sustainable rental yield.
“At FHL, demand for limited company buy-to-let products is increasing, as more landlords understand there is a way to protect profitability within an SPV. So, there is new business out there. However, instead of waiting for the phone to ring, intermediaries will need to be proactive in their new business activity to ensure that they do not have a fallow month.”