Specialist Lending - May 2017  

What lies in store for complex buy-to-let?

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Changes in the complex buy-to-let market

Alice Watson, head of marketing at Retirement Advantage equity release, has urged advisers to have more objective conversations about retirement income and the role property can play.

If one’s own home can help provide an income in retirement, renting out a second home or having a diversified portfolio of complex buy-to-let and vanilla properties could also be considered. 

Different perspective

For Louisa Sedgwick, director of sales for Vida Homeloans, there has been a mind-shift in the way buy-to-let is considered.

She comments: “The mass of changes over the past 12 or so months have affected landlords. 

“Since the wider development of the buy-to-let proposition, moving it away from a commercial transaction towards the residential model, buy-to-let transactions have increasingly been seen as ‘mainstream’. 

“This is simply no longer the case”.

Ms Sedgwick explains although complex residential buy-to-lets cannot be deemed as a “commercial” transaction, given the fact property is residential in use, the “overriding proposition needs to be recognised as a commercial one, whether that is to gain a regular rental income or for capital growth.”

She says this is likely to require a completely “different mindset” from the intermediary alike, “bringing about the demise of the dabbler or dinner party landlord”.

Importance of relationships

“Given the changes to criteria, tax and the new approach to portfolios, brokers will need to keep on top of what different lenders are offering and which areas represent a strength for more specialist lenders”, says David Hollingworth, associate director of communications for London & Country Mortgages.

Jeremy Duncombe also advocates forging good relationships with lenders and other professionals to overcome any potential challenges.

He comments: “By building relationships with tax advisers, brokers can deliver what their clients are looking to achieve more effectively.”