Property investors and buy to let landlords are increasingly turning towards intermediaries as the imminent changes to mortgage tax relief loom ever closer, creating a new hurdle for the sector to tackle.
The mortgage tax relief changes, coming into effect in April, triggered a 26 per cent rise during Q4 of 2016 in the average number of mortgage applicants opting to use intermediaries. The research, coming from the Intermediary Mortgage Lender’s Association Tracker index, discovered that each intermediary received an average of 58 enquiries. This marks significant growth in comparison to the 46 received in the third quarter.
The report, issued quarterly, follows the journey of mortgage applicants in the buy to let sector through the approval process. It monitors the investors from their first enquiry to completion. The tracker then studies the results, dividing them by firms dealing with different applicants ranging from buy to let investors, first time buyers, owner-occupier home movers, those seeking to remortgage, and those applying for specialist loans.
Executive Director of the Intermediary Mortgage Lenders Association, Peter Williams, attributed the growth in the use of intermediaries to an increasingly complex market, which is often challenging for landlords and property investors to navigate alone. He said: ‘It’s unsurprising that there was an increase in the numbers of borrowers seeking expert advice in the final quarter of 2016, given that the changes to buy to let underwriting standards and mortgage tax relief were looming large on the horizon. As the layers of regulation in the market become increasingly complicated, and the number of products increase, the intermediary market continues to play a very important role in the provision of mortgage finance to a variety of borrower types.’