Much has been made of sub-prime’s demise in the mortgage market, with the only glimmer of hope being the buoyant buy-to-let sector.
But even there I sense trouble lies ahead, with higher LTV products and pricing in the firing line.
Lenders seem to be split into two camps in the current market. On one hand we have those that are not looking to lend much and trying to stem their flow of business, while on the other we see lenders filling their boots with applications.
The trouble is that all lenders have targets and for those filling their boots, these are being achieved quickly.
I’ve heard some packagers boasting they are doing more business than ever and saying they have already adapted their business models to account for this. But what happens when lenders hit their targets?
There is certainly demand but no appetite for lending, which means len-ders will put up rates and tweak criteria even further.
We’ve seen the number of 90% LTV deals fall and now even the previously standard 85% LTV products are in danger of disappearing.
Some specialist buy-to-let lenders now only go as high as 80% LTV so it’s time to work your client database and ensure your customers are getting good deals while they can.
If brokers have landlord customers with extensive portfolios who are either geared to the limit or looking to borrow money for additional purchases, it would be prudent to remortgage them as soon as their early repayment charge periods expire.
As to where brokers should be placing business, they would do well to look at companies that are large enough to offer incentives and pay quickly be-cause at the moment it’s all about cash flow.
Director of marketing