Now more than ever intermediaries should look to specialist brokers
Andrew Turner (pictured) is chief executive of Commercial Trust Limited, in Norwich
The buy-to-let industry continues to go through rapid change, with a wave of new legislation and tax changes causing confusion for anyone not keeping close tabs on the industry.
For intermediaries, there has never been a more important time to call upon the expertise of specialist brokers, to help determine the best approach for your clients.
The past couple of years has seen the government crackdown on buy-to-let landlords, with a raft of new legislation aimed at taxing profits, while the Prudential Regulatory Authority (PRA) rules have tightened lending criteria – all of which has left many unsure of their best options.
Tighter mortgage affordability calculations from lenders regulated by the PRA are causing some investors to struggle to secure the funds they want.
Landlords with more than three properties face more stringent underwriting, the criteria for which varies for each lender (at our count, this means variation across around 40 lenders).
Couple this with the reduction in mortgage interest tax relief, the additional 3% stamp duty levy and the change in the wear and tear allowance, and you have an exceptionally complex mix of financial factors at play.
Then of course, there is the range of buy-to-let products available on the market, a number that is at a 10-year high and represents a multitude of fixed and variable rates.
Therefore, identifying a buy-to-let solution that fulfils the circumstances and needs of your client, whilst achieving value for money, becomes a pretty tall order.
With strong indicators that the Bank of England will soon raise interest rates, many landlords are considering remortgaging in order to protect their payments against possible rates rises in the future.
Given this backdrop, advising on buy-to-let when it is not your specialism, may feel like wading through sand.