A significant number of buy-to-let landlords making financial changes to mitigate rising costs presents a “real opportunity for advisers”, according to Foundation Home Loans director of sales, Grant Hendry.
Foundation Home Loans' latest report found more landlords had taken steps, such as renegotiating mortgage finance, increasing rent, or selling property, to combat increased costs.
The survey of 774 online interviews with landlords found 30 per cent of respondents had renegotiated their mortgage with their existing lender, 29 per cent had increased rents, and 25 per cent had cancelled plans to purchase additional property.
The research also revealed the prevalence of advice in the market as, when asked how they had arranged their most recent buy-to-let mortgage, 68 per cent of respondents said they had done so via a mortgage adviser.
Meanwhile 26 per cent had arranged it directly with a lender, and 3 per cent had done so via an online broker.
Hendry argued this presented a “real opportunity” for advisers in the buy-to-let space, because a “significant” minority of landlords are still opting to go to their lender, rather than review what is available across the entire market.
“Plus a number feel they are getting ‘advice’ in doing this, which may support their understanding of the rate type, but does not open them to what’s available from other lenders,” he added.
While Hendry acknowledged the product transfer offer might be the most suitable for the landlord at that time, he argued there are clear benefits in taking advice from professional, independent advisers.
“This is a competitive market and there may be other more suitable, cheaper product options available to them,” he explained.
“It clearly remains challenging times for landlords but they are maintaining the profitability of their portfolios, yields continue to rise, plus there remains strong tenant demand against a backdrop of relatively low supply and higher demand,” Hendry continued.
“Advisers can clearly play a vital and pivotal role for them, and our survey numbers suggest there are still a significant number of landlords who are not using the services of an adviser, and therefore missing out on a raft of product options.”
tom.dunstan@ft.com
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