Landlords are turning to brokers for buy-to-let mortgages
The process of purchasing a buy-to-let property can be extremely stressful, especially for new landlords and investors. You have to complete a mountain of paperwork, ensure that you're up-to-date on developments that could affect landlords, such as the potential removal of the wear and tear allowance, and arrange finance for your property. It is unsurprising then that over two-thirds of landlords are using brokers or intermediaries when it comes to arranging a mortgage for a buy-to-let property.
Why landlords are turning to brokers
Research done by the National Landlords Association (NLA) has found that roughly 69% of landlords arranged their most recent buy-to-let mortgage through a broker. This is a huge majority when compared to the number of landlords who dealt directly with a lender: 13% of borrowers arranged their mortgage with a lender in a branch, 12% arranged it over the phone, and 5% arranged their most recent mortgage with a lender online.
According to more than half of the landlords who said they used a broker to arrange their BTL mortgage, the reason they did so was because they felt that they had a better opportunity to review all of the mortgage products available on the marketplace. This is unsurprising because with the recent buy-to-let boom, more and more lenders are offering unique mortgage products to borrowers, who may feel overwhelmed trying to find the best product for their needs.
The second most popular reason why landlords turned to brokers to arrange a mortgage was because of an established relationship, with 42% of buy-to-let landlords saying they returned to their broker after successfully dealing with them during a previous mortgage purchase.
When borrowers were asked why they dealt directly with lenders to arrange their BTL loan, 35% said they did so because they already had a loan with that lender, while 27% already did their banking with that branch. It is clear then, that both landlords who deal directly with the mortgage provider, and landlords who use a broker, do so because of an element of trust. Where these two types of landlord differ is that those who use brokers are much more determined to find the best mortgage product for them, not content to go with their bank or building society if they can find a better product elsewhere.
“A good relationship goes a long way”
Commenting on these findings Carolyn Uphill, Chairman of the NLA, said that brokers would be pleased to know that their relationship with landlords is one based on trust, and that a “good relationship goes a long way in business.”
She also mentioned how interesting it was that landlords seem to be increasingly arranging their BTL mortgages online, something that doesn’t occur with most other products and services.
Ms Uphill concluded by commenting on how difficult it could be, especially for first-time landlords, to find the perfect BTL mortgage and arrange it, and that these results demonstrate that not only are landlords placing their trust in brokers to arrange the best mortgage possible for them, they are also satisfied with the service they are receiving.
Are you looking to buy or invest in a buy-to-let property in Cardiff? We have a wide selection of houses and flats which can be viewed on our website. If you have any questions about buy-to-let or the new Rent Smart Wales landlord legislation, please feel free to contact us or pop in to our Cardiff Bay branch.
The information contained within this article was correct at the date of publishing and is not guaranteed to remain correct in the present day.
