Alan Cleary - Managing Director of Precise Mortgages
Brokers are a resilient bunch and can usually find ways of getting through lean times when they arrive. The specific approach will vary depending on a broker's experience, expertise and the network they may belong to. It could be that a quieter quarter makes time for that back-book contact strategy that never quite hits the top of the priority list. It might be time to revisit protection sales for those buyers who didn't consider life cover fundamental two years ago, but have since had children and would now really understand its value.
One area that I think offers brokers considerable opportunity is in buy-to-let, a sector that is now fraught with complexity. Not only can intermediaries offer invaluable advice to clients unsure of what to do with their existing portfolios, there's also some interesting innovation out there that can support clients looking to invest in buy to let today. There are an increasing number of products out there that cater to this type of scenario – and I’m absolutely not talking about ‘flexing’ criteria. No.
Instead, I'm talking about helping clients to understand how to add value to a deal over time in order to create a property that does fit lenders' criteria. Increasingly, it's not enough to buy a property with a buy to let mortgage, give it a lick of paint and expect a decent yield. The deals that we see that offer landlords returns worth having require a bit more forethought and some investment up front to add capital value and maximise rental incomes.
Until very recently, funding this was a trickier business than applying for a buy to let loan and would typically require a short-term loan alongside the buy to let. It could have been seen as a lot of work for a broker not used to bridging, especially when there was a steady stream of first-time buyer enquiries filling up the diary.
Now, it's possible to do this type of deal in one application; we launched our refurbishment buy to let because of precisely this challenge. In a market where the bread and butter deals are fewer and further between, and where clients have to be smarter to stay in the profit-making game, it can really pay for brokers to take another look at those areas that sit beside your usual remit.
At a time when the majority of news surrounding this market is subdued at best, it could allow you to give your clients something to really smile about.