Large lenders are too prescriptive, have no flexibility and are making it harder for mortgage brokers to secure the best deal for their buy-to-let clients.
This is the view of Jane King, mortgage adviser for London-based Ash Ridge Private Finance, who said traditional high-street banks have not been as helpful to brokers as they could be, especially considering all the new buy-to-let regulations and tax changes coming into force.
Ms King told delegates at the Financial Adviser Mortgage Masterclass, sponsored by Aldermore, that high street lenders want a one-size-fits-all client.
She said: "They want you to tick all of their boxes and there is just no flexibility. If you have a client who has something that sits just slightly outside of their criteria, then the answer is just 'No'.
"They are just not interested."
Ms King said high street lenders request "every single bit of paper you can think of, and you have to hope that, from that mountain of stuff they have received, they have enough to go on to underwrite the case.
"If not they will come back to you and ask for another mountain of stuff. By contrast, the smaller lenders will know exactly what they will need to make the decision."
She said while the bigger banks can sometimes give very competitive rates, these are only for the "safe and sensible", tick-all-the-right-boxes clients.
Some lenders are imposing up to 2 per cent of fees and that is even without the legals and valuations and the rest of the additional expenses.Jane KingLouisa Sedgwick, director of sales for mortgages at Vida Homeloans, agreed there was a problem in the largest lenders trying to turn around their "large ships" of technology in order to be more flexible and innovate more quickly.
In addition, Ms Sedgwick said, the larger banks have also been bitten in the past, which might explain their additional caution.
She said: "Some big banks have seen problems with buy-to-let in the past, when it was not so well regulated, so they are sitting on a lot of legacy issues.
"Perhaps they have learned lessons that, from a risk appetite, buy-to-let does not look good. That said, I've seen some trying to innovate to make a [buy-to-let] product fit, but this sort of innovation may or may not work."
Robert Sinclair, chief executive of the Association of Mortgage Intermediaries, said currently a range of the smaller building societies have decided not to play in the buy-to-let space at the moment.
He said: "They may come back and they may not. This is an opportunity for the niche challengers to prove their worth to advisers."
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