FSE Manchester: All buy-to-let lenders need to change their DSS tenant rules

The small number of buy-to-let lenders who don’t allow landlords to let properties out to tenants have been urged to “get on the bus” in a panel debate at FSE Manchester today.

On the panel were David Whittaker, chief executive of Keystone Property Finance, Adrian Moloney, sales director at One Savings Bank and Steve Cox, distribution director at Fleet Mortgages.

Whittaker said: “As an industry we must be careful of not giving shelter or cause celebre to those few lenders who have not yet got on the bus.

“They need to get on the bus with us because otherwise we will all find ourselves legislated against for the few who do not follow the example of the majority.”

Cox said: “For lenders in general, allowing landlords to choose the most appropriate tenant is probably the most important situation that everyone can adopt moving forward.”

And Moloney said: “There’s only a handful of lenders with that policy now and I’m sure with the level of campaigning we’re seeing, we’ll get some further clarity on that as well.”

Lenders that changed their policies relatively recently include NatWest and Platform, who dropped restrictions on letting to DSS tenants in March and April respectively.

Speaking after the panel debate, Payam Azadi, director of broker Niche Advice, praised The Mortgage Works and BM Solutions as lenders that have welcomed landlords letting to DSS tenants for some time.

However he felt that individual lenders should be free to establish their own risk appetites, rather than being pressured to change their DSS policies due to pressure from the press and other lenders.

Azadi said: “Historically lenders have been wary regarding whether landlords are more likely to stop receiving rent, but we are seeing more and more lenders come to the fold on that.

“The question is why have lenders changed their policies?

“Is it from a PR perspective because it doesn’t look good, or is it a change of ruling that means it’s easier to evict tenants on DSS?

“If it’s because of press pressure each lender needs to be able to make a decision based on their risk appetite.

“It’s a bit rich for some lenders to say ‘you should change your policy on this’ when, if you are a smaller lender, it could represent a bigger risk to your balance sheet.”

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