Financial advisers involved in the buy-to-let sector, especially in writing portfolio landlord mortgage business, can expect to see increases in procuration fee levels from the last quarter of this year.
So says David Whittaker of Mortgages for Business, who was speaking at the Financial Services Expo (FSE) Wales on Wednesday.
Whittaker (pictured) said that he had recently been at a closed event for buy-to-let lenders where one lender representative outlined their approach to paying for portfolio landlord business. “One lender representative stood up in front of us all and said that in Q4 they will be paying more to brokers who are having to do more work on managed portfolio cases,” he said.
He suggested that when this lender moved, advisers could expect similar changes from others in the marketplace. He added: “That change will force the others to move. When one goes, others will follow. It is good news that the market will be recognising your contribution and will begin paying for it.”
Whittaker said that while predictions for buy-to-let gross lending had been downgraded by the CML recently – to £35bn in 2017 and an anticipated £33bn in 2018 – advisers still had opportunities within the sector, and that the lending figures did not necessarily take into account the value of product transfer business which increasingly lenders were paying for.
Liz Syms of Connect for Intermediaries agreed that product transfers could be a major source of business for advisers, plus suggested that in the lead up to the portfolio landlord underwriting changes – due to come into effect on 1 October – activity levels might increase. “There is the potential to see a spike in business before the end of September,” she said. “Advisers and clients could get the benefit from the current rules now as we don’t know how the new rules will land.”
