The pace of growth in the buy-to-let sector may have slowed in recent times but are lenders still keeping the tempo when it comes to their service and products?
In this, Mortgage Strategy’s second buy-to-let ratings table, our panel reveal which lenders have fine-tuned their propositions over the last six months and which are still slightly off-key.
Walter Avrili, managing director, John Charcol
David Hollingworth, associate director of communications, London & Country
Steve Olejnik, chief operating officer, Mortgages for Business
Ying Tan, managing director, The Buy to Let Business
Greg Cunnington, associate director, Alexander Hall
Richard Merrett, managing director, Large Mortgage Loans
Aaron Strutt, product and communications manager, Trinity Financial
David Sheppard, managing director, Perception Finance
Rob Clifford, group commercial director, SDL Group
Jonathan Clark, mortgage partner, Chadney Bulgin
Godiva Mortgages (Coventry for Intermediaries)
Godiva has once again hit the high note and maintained the top spot.
Chadney Bulgin mortgage partner Jonathan Clark says: “Despite being the subsidiary lender of a relatively conservative building society, Godiva show a remarkable appetite for BTL with competitive products and some genuinely flexible criteria.”
London & Country associate director of communications David Hollingworth calls it the “model of consistency” with its mix of competitive products and good service.
While director of lender relationships and new homes at Alexander Hall Greg Cunnington praises its no Early Repayment Charges, which he says are a great option “in a market where landlords want increased flexibility.”
Virgin has scaled the octaves, moving from seventh to second.
Cunnington says: “The improvements to its top slicing policy make it a key lender for the London BTL market.”
Clark feels the lender’s £100 service promise underlines its commitment to BTL but says: “It’s a brave move given it will now accept applications from portfolio landlords.”
Trinity Financial product and communications manager Aaron Strutt praises its “good rates and positive attitude.”
While Perception Finance managing director David Sheppard says if a case does not fit on rent alone the lender has now started to look at affordability but still requires a minimum rent.
He says: “In my view this is too much of a middle ground and not helpful to brokers. It should either go to a full affordability model or stick to rent alone.”
BM Solutions was slightly out of tune with the panel and has fallen one place.
John Charcol managing director Walter Avrili says the lender is “good but a bit pricey.”
While Sheppard feels it has dropped in popularity since its affordability changes.
“It really needs to revisit affordability to make it easier on brokers to do business with it,” he says.
For new customers, Clark feels the lender offers flexible criteria and a slick service.
“On the other hand, its customer retention products are still not competitive,” he says.
Strutt says its brokers are very pleased with the service and rates the lender offers and feels it “consistently performs.”
The Mortgage Works (Nationwide Building Society)
TMW has kept a steady beat and held onto fourth position.
Largemortgageloans.com managing director Richard Merrett welcomes the launch of its limited company offering.
While Hollingworth says: “It has bared its teeth on price but also shown some desire to innovate and develop options outside the mainstream.”
Clark also praises its “sharp rates.”
Sheppard however says: “Its surveyors are keener than other lenders to give lower rental figures, even on remortgage cases where there is a tenant in situ.”
Santander for Intermediaries
Santander has fallen a little out of rhythm and slipped two places.
Avrili feels its underwriters are “unable to converse with brokers directly,” which he says makes the case appeal process difficult.
Cunnington however says its move to a 125% Interest Cover Ratio assessment on like for like remortgages has been “very positively received by all advisers.”
Sheppard also commends its stress testing: “Santander has been very good for BTL especially with its better stress test for like for like remortgages and 5-year fixed rates,” he says.
Merrett feels the lender demonstrates that you can deliver excellent BTL options without lots of specialisms and instead “just through simple, effective criteria and products.”
Precise has upped its tempo and gained two places.
Cunnington says: “Its top slicing policy, combined with the creation of a new service team, has ensured in the face of increased competition in the specialist BTL space Precise remain our top lender.”
Clark feels the lender offers solutions for more complex cases and continues to “adapt its criteria to attract more business.”
“Precise never stands still”, says Hollingworth and is consistently looking for niches that can be filled, such as lending against studio flats.
While Avrili feels it is a “good solid lender in the space it is in” and says it is good it offers the same product for all BTL routes.
Paragon may have fallen one place but the panel feel it is playing the right tune with its professional landlord offering.
Merrett says the lender is one of the few in the portfolio and limited company space offering “competitive rates with fixed, rather than percentage fees.”
Clark says its limited company rates are currently amongst the best available and processing times are “excellent.”
Hollingworth feels the lender’s strength is its position as a BTL specialist for professional landlords.
“The clarity of the split in products between portfolio and non portfolio only underlines that,” he says, whilst also feeling that processing times could be better.
RBS (NatWest Intermediary Solutions)
NatWest has received mixed reviews from the panel.
Avrili describes it as a “good, solid lender.”
Cunnington welcomes its recent criteria tweaks, particularly in relation to top slicing.
Yet Sheppard feels it needs to take a fresh look at its affordability for BTL.
“I have very little confidence in using it for this type of business as it seems very risk averse right now,” he says.
While Clark says although its rates are competitive, its “make it up as you go along” underwriting criteria can prove frustrating for busy brokers.
The panel feel Kent Reliance has been somewhat flat this quarter, tumbling five places.
Clark says: “It still offers a home for your most challenging cases, such as expats, but at a price.” He says its rates can sometimes be hard to swallow.
Avrili also feels it can be pricey but does possess a “can-do attitude”.
Cunnington says its credit committee offers: “great flexibility, particularly on larger portfolio cases.”
While Mortgages for Business chief operating officer Steve Olejnik feels it is: “leading the way on specialist BTL, providing innovative solutions for brokers and the professional landlord.”
Fleet Mortgage has remained at the bottom of the table unable to get above the base note.
Hollingworth says: “Fleet is very much a specialist BTL lender and largely competes on the criteria it offers, particularly on rental income, which offers an alternative to others in the market.”
Clark feels its rates and service have both improved “significantly” this year and its BDM service has also been bolstered.
Avrili feels the lender is pricey and “offers no product transfer facility, which is not good,” he says.
Barclays (Wild card)
Barclays is the Wild Card and sits on the scales in ninth position.
Clark says for straightforward cases its rates are market-leading; though
adds: “Don’t give it any portfolio cases – it is currently 15 days behind.”
Sheppard says it is a go-to lender for a lot of low rental yield properties.
But says: “It lets itself down on its IT system which is arduous to go through for an application.”
Strutt describes its rates and criteria as attractive; although says: “some of our clients have had issues with the ‘Know Your Customer’ requirements.”
Merrett however says: “With good products and an excellent affordability calculator that considers personal income they have long been one of the key go-to lenders in BTL. This is particularly evident for good earners with low-yield properties.”
Cunnington feels its criteria is the strongest in the market for its client base due to its “top slicing, new build flat loan to value and joint borrower sole proprietor policy.”
The beat goes on
The buy-to-let market is still absorbing the tax and regulatory changes it has had to contend with of late but it does not seem to have hindered lenders’ desire to adapt and strike the right chords to compete for brokers’ business.
|Lender||Service||Products||Overall Proposition||Confidence in using them||BDM / Corporate Account Support||% Average||Rank||Rank Jan18||Rank Change|
|Godiva Mortgages (Coventry)||82||85||80||86||81||82.8||1||1||0|
|BM Solutions (LBG)||83||73||70||81||77||76.8||3||2||-1|
|Santander for Intermediaries||79||78||76||82||61||75.2||5||3||-2|
|RBS (NatWest Intermediary Solutions)||73||67||66||70||78||70.8||8||9||+1|