MortgagesAug 14 2014

Two in five brokers expect more buy-to-let business

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Around 37 per cent of brokers expect to do more buy-to-let business this year, according to research carried out jointly by Simplybiz Mortgages and Natwest Intermediary Solutions.

This follows discussions last month that buy-to-let borrowing criteria was ‘too rigid’ and that it needs to be regulated. It also comes into the wake of the regulator’s warning that buy-to-let could be used by borrowers to circumvent new affordability rules.

Around 55 per cent of brokers have seen an increased demand for mortgages from second and third-time movers, the research, which was carried out amongst 80 Simplybiz Mortgages members, revealed.

Remortgaging is also on the line up with 40 per cent saying that they had seen an increase in this type of business compared to six months ago.

The survey revealed that 80 per cent of brokers’ customers were aware of the changes to the affordability assessment. Similarly, 71 per cent said they were now more focused on the packaging quality of applications.

Simplybiz Mortgages and Natwest Intermediary Solutions said in a statement: “One of the consequences of the introduction of new MMR requirements is that brokers have placed more focus on getting applications packaged right first time”.

The research revealed that for first-time buyers, there was an equal split in opinion on what was the most appealing type of incentive a lender could offer, with a figure of 40 per cent opting for free legal and valuation fees and another 40 per cent picking stamp duty costs paid.

A total of 8 per cent said a cashback deal was preferred with 2 per cent suggesting the lowest rate of interest possible.

Graham Felstead, head of Natwest Intermediary Solutions said: “Whilst the introduction of the new MMR requirements was a major milestone for the industry, it is great to see that SimplyBiz Mortgages members have embraced the changes communicating them clearly to their customers and making greater efforts to submit correctly packaged applications.

“As a lender we value highly ‘right first time’ packaging as it means we can process applications quicker with less work for the broker to do – a win:win situation for brokers and their customers.”

Martin Reynolds, chief executive of SimplyBiz Mortgages, added:“Now that MMR has been delivered we are keen to refocus on continuing to develop the business opportunities for our members.

“This research shows that market sentiment is in a good place and gives us and our lender partners a good steer on where to focus our efforts.”