Buy-to-let investors urged to use a mortgage broker

Buy-to-let landlords looking to add to their property portfolios are being encouraged to use a specialist mortgage broker as they could “make a difference to maintaining profit”.

Research shows that fewer buy-to-let investors are actively looking to commit to investing in buy-to-let property following the stamp duty and income tax crackdown, resulting on a squeeze on many landlords’ profits.

But many landlords could boost profits simply by cutting their outlay on mortgage interest payments, and the best way to do that is to have a conversation with a specialist buy-to-let mortgage broker, according to Andrew Turner, chief executive at Commercial Trust Limited.

Landlords are feeling the effects of tax changes as the government continues to target buy-to-let, and that is why many private landlords are considering abandoning the sector as the costs begin to outweigh the benefits.

In order boost the supply of much needed homes in the private rented sector, more needs to be done to incentivise people to invest in the buy-to-let sector, and that is where a broker with access to a wide range of historically low mortgage borrowing rates could potentially help.

Turner said: “The value to landlords of utilising a broker working with a wide breadth of lenders has never been greater.

“Buy-to-let landlords have seen enormous changes in the tax regime and a progressive set of rules which are professionalising the industry, adding further cost along the way.

“Renting property is a business, so like any other, landlords want to operate at a profit.

“The changes that have taken place mean that research and meticulous planning are essential to doing so.”

The number of buy-to-let mortgage products on the market is currently at a 12-year high, according to the latest figures.

The data, taken from the latest Moneyfacts report, shows that the number of BTL products has increased by 21% in the past year to a total of 2,396, which is the highest figure since October 2017 when there were 3,305 products available.

The research showed that brokers have access to six times more products compared to going directly through a lender.

Turner continued: “Competition is healthy and has raised the game in terms of the amount of choice available to borrowers.

“But one-size does not fit all, in terms of borrower circumstances. That is where a broker can save time and money.”

According to mortgage sourcing platform Twenty7Tec, brokers have access to 12,000 products across the whole mortgage spectrum, while just 2,000 are available directly from lenders.

Furthermore, each lender will only offer you their own products, vastly reducing this number on a case by case basis.

A report by Legal and General shows strong support for using brokers, with 98% of borrowers finding the help they received ‘valuable’ and 95% saying they would recommend using a broker to friends or family.

“An increasing array of choice definitely favours investors, but as is demonstrated in the statistics above, using a broker can be invaluable in finding the wood amongst the trees,” Turner added.

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